The foreclosures in New York are handled quite differently than the other states in America. Hence it is very important for you to know the foreclosure laws of the state if you want to buy property in New York.
In New York, there are judicial as well as non judicial foreclosures. The properties are held by a deed of trust and hence the foreclosure process does not involve the state courts. The county handles the foreclosure process which is arranged by the lender.
Hence the foreclosures in “trust states” relatively take more time than the judicial foreclosures. The foreclosure in a “trust state” takes an average of about 104 days.
The properties in New York have a mortgage deed instead of a trust deed. Most of the New York bank foreclosures are judicial foreclosures as the proceedings must pass through the courts before the property can be finally sold at a public auction.
The foreclosure proceeding may take anywhere between 12 and 18 months since it is a judicial procedure. There are many parties involved as well such as tenants of the owner, mortgage holder, creditors, borrower, etc.
In case of a judicial New York foreclosure, the lender will first send a warning of looming foreclosure to the borrower. However this is not a requirement in New York but it is often done for courtesy. The lender then files a suit if the borrower still defaults.
The borrower is then given a notice about the foreclosure proceedings and he is required to be in court. If he fails to appear, the court will have to rule against the borrower. If the borrower appears in court, then the court will begin the case for ruling and the foreclosure sale is scheduled. This process usually takes about 7-9 months. The date of foreclosure is scheduled after 4 months of ruling.