When you default on your mortgage payments, your property will enter foreclosure. This process allows banks and lenders to recover their dues by selling or possessing the property.
Foreclosure often takes one of these two paths. The lender files a lawsuit to initiate foreclosure (judicial foreclosure) or proceeds with the foreclosure without involving the court (non-judicial foreclosure).
It all depends on the state laws. Some jurisdictions only allow judicial foreclosure, while others allow both kinds. Here is what you need to know about New York laws.
New York is a judicial foreclosure state
New York laws make it mandatory for a lender to pass through court to initiate foreclosure proceedings. The process starts when you default on your mortgage payments. The lender must issue you a 90-day foreclosure notice before going to court.
The lender will start the foreclosure case in court after the 90-day notice expires and you are still in default or behind on mortgage payments. You can choose to contest the foreclosure or let it happen. If you challenge the foreclosure, a judge will hold a hearing and determine the matter. Once the judge issues a foreclosure judgment approving the sale, the lender can legally proceed with it.
The entire process can take months or years, depending on the circumstances of each case. For instance, contesting the foreclosure can considerably lengthen the foreclosure proceedings and give you time to repair your finances.
Protect your interests in the face of foreclosure
It is crucial to understand the legal procedures involved and what you can do to protect your interests if your home is at risk of foreclosure. Most importantly, consider seeking qualified counsel to help you figure out your options and potentially save your home.