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Questions

How are mortgage liens treated in New York?
How are New York mortgages foreclosed?
What are the legal instruments that establish a New York mortgage?
How long does it take to foreclose a property in New York?
Is there a right of redemption in New York?
Are deficiency judgments permitted in New York?
What statutes govern New York foreclosures?

Answers

How are mortgage liens treated in New York?

New York is known as a lien theory state where the property acts as security for the underlying loan. The document that places the lien on the property is called a mortgage. It should be noted that New York does have a non-judicial foreclosure process however this is rarely used by lenders.

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How are New York mortgages foreclosed?

In New York, the lenders go to court in what is known as a judicial foreclosure proceeding where the court must issue a final judgment of foreclosure. The property is then sold as part of a publicly noticed sale. The court with jurisdiction over a foreclosure is known as the Supreme Court in the county in which the property is located. A foreclosure complaint involving a property in Manhattan would be filed in the Supreme Court of New York: New York County. A complaint is filed in this court along with what is known a lis pendens. A lis pendens is a recorded document that provides public notice that the property is being foreclosed upon.

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What are the legal instruments that establish an New York mortgage?

The documents are known as the mortgage, note, and in a commercial transaction, a security agreement. Sometimes the mortgage document is combined with the security agreement.  A mortgage is filed to evidence the underlying debt and terms of repayment, which is set forth in the note.

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How long does it take to foreclose a property in New York?

Depending on the court schedule, it usually takes approximately 120-180 days to effectuate an uncontested foreclosure. This process may be delayed if the borrower contests the action, seeks delays and adjournments of hearings, or files for bankruptcy. A foreclosure sale must be advertised at least four (4) weeks in advance of any sale and sales usually take four (4) months after final judgment for foreclosure is granted.

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Is there a right of redemption in New York?

New York has no statutory right of redemption, which would allow a party whose property has been foreclosed to reclaim that property by making payment in full of the sum of the unpaid loan plus costs.

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Are deficiency judgments permitted in New York?

Yes. A deficiency judgment may be obtained when a property in foreclosure is sold at a public sale for less than the loan amount which the underlying mortgage secures. This means that the borrower still owes the lender for the difference between what the property sold for at auction and the amount of the original loan. The Plaintiff must file a motion within 90 days after the property sale auction to enforce this right.

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What statutes govern New York foreclosures?

The laws that govern New York foreclosures are found in New York State Consolidated Laws, Article 13.


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