New York Foreclosure Laws

If you may be subject to a foreclosure action in New York, a good place to begin learning about the foreclosure process and your rights as a homeowner is by reviewing New York’s foreclosure statutes. Here you'll find instructions on how to access these statutes and a summary of the most important sections.

Finding New York’s Foreclosure Laws

New York’s foreclosure laws can be found in New York Real Property Actions and Proceedings Law (N.Y. Real Prop. Acts. Law), Sections 1301 through 1391, and New York Civil Practice Law and Rules (C.P.L.R.), Section R3408. To find these statutes online, follow these steps:

1. Begin at the New York State Legislature website at http://public.leginfo.state.ny.us.
2. At the bottom of the page under the “Search” heading, click “Laws of New York.”
3. To locate New York Real Property Action and Proceedings Law, look under the list of “Consolidated Laws,” scroll down and click on “RPA Real Property Actions & Proceedings.”
4. Scroll down to and click “Article 13 - (1301 - 1391) Action to Foreclose a Mortgage.”
5. You should see a list of the sections in Article 13. Click on the section you are interested to read the text of that section.

To locate New York Civil Practice Law and Rules, Section R3408, follow steps 1 and 2 above, click “CVP Civil Practice Law & Rules,” click “Article 34 - (R3401 - R3409) Calendar Practice; Trial Preferences,” and click “R3408 – Mandatory settlement conference in residential foreclosure actions.”

Summary of New York’s Foreclosure Laws

New York’s foreclosure laws are lengthy and complex. Read on for a summary of those sections you will find most useful.

Judicial Foreclosure

Judicial foreclosures are required in New York. N.Y. Real Prop. Acts. Law § 1301. The lender must serve the defaulting borrower with a summons and complaint to initiate the foreclosure action and must secure a judgment of sale from the court before it can sell a home to recover the defaulted mortgage debt. N.Y. Real Prop. Acts. Law §§ 1301, 1351.

Notices

In New York, homeowners facing foreclosure should expect to receive the following notices:

• Pre-foreclosure notice. Lenders are required to send defaulting borrowers a pre-foreclosure notice 90 days before initiating a foreclosure lawsuit. N.Y. Real Prop. Acts. Law § 1304. The notice is required to state the amount required to cure the default, the name and address of the lender or servicer, and a list of state approved housing counseling agencies. N.Y. Real Prop. Acts. Law § 1304.
• Notice regarding the foreclosure process. If the property in question is an owner-occupied one-to-four family home, the lender must serve the defaulting borrower with a notice about the foreclosure process along with the summons and complaint. The notice must describe the foreclosure process, provide the borrower with the phone number to a state-sponsored toll-free helpline, and warn borrowers against scams. N.Y. Real Prop. Acts. Law § 1303.
• Notice to avoid default judgment. For residential properties of three units or less, the summons must also contain a special notice warning defaulting borrowers that the lawsuit will continue even if the borrower makes a payment to the lender and the borrower must respond to the summons and complaint to avoid a default judgment N.Y. Real Prop. Acts. Law § 1320.
• Notice of mandatory settlement conference. The court must send notice to both the defaulting homeowner and lender advising them of the time and date of the mandatory settlement conference (see Mandatory Settlement Conference, below). The notice must inform the parties of the purpose of the conference and the documents each party is required to bring. C.P.L.R. § R3408. The lender is required to bring a payment history of the loan in question, the amount needed to cure and pay off the loan, and the mortgage and the note. C.P.L.R. § R3408. The homeowner is required to bring proof of income. C.P.L.R. § R3408.

Mandatory Settlement Conference

New York law requires the court to hold a mandatory settlement conference within 60 days of the filing of the proof of service with the court clerk for all foreclosure actions involving owner-occupied properties. If a homeowner appears without counsel, the court may appoint counsel for the unrepresented homeowner. Both parties are required to negotiate in good faith to reach a mutually agreeable resolution. C.P.L.R. § R3408.

Right to Cure

A borrower may cure a mortgage default by paying into the court the amount due, plus costs. If the borrower cures before the final judgment, the foreclosure complaint will be dismissed. If the borrower cures after the final judgment but before the foreclosure sale, the proceedings will be stayed. N.Y. Real Prop. Acts. Law § 1341.

Right of Redemption

In New York, homeowners have the right to redeem their properties up until the sale of the property. After a property has been sold pursuant to a judgment of sale, the homeowner no longer has a right of redemption. N.Y. Real Prop. Acts. Law § 1352.

Deficiency Judgment

New York law allows for deficiency judgments. The lender must bring a motion for deficiency judgment within 90 days of the consummation of the sale. The amount of the deficiency is determined by the court and is equal to the amount of the mortgage debt owed, plus interest and costs associated with the foreclosure process, less the fair market value of the property at the time of sale or the sale price of the property, whichever is higher. N.Y. Real Prop. Acts. Law § 1371.