Foreclosure is a serious issue. If successful, it results in the loss of a home, a consequence that courts take very seriously. Accordingly, when a lender initiates foreclosure proceedings, it must strictly follow a number of state laws to move forward. If the lender does not comply with these laws, a court may rule to halt the foreclosure.
If a borrower has fallen behind on payments, the lender must let that person know through a breach or demand letter. Using one of these letters, lenders essentially put homeowners on notice that they are not complying with the terms of their loan. The notice must spell out that there is a default and that action is required to bring the loan current, along with the date by which action is required. The letter will also stipulate that a failure to make payment to address the default could result in the acceleration of the debt.
Under New York state law, a lender must send a notice about how the borrow can bring the loan current, and also give information about nearby government-approved housing counseling agencies that may assist. The lender must then wait 90 days before it can initiate foreclosure proceedings.
If after 90 days, the borrower has failed to cure the default (or otherwise work out new loan terms with the lender), the lender may file a lawsuit in state court. All foreclosures in New York are judicial, so a lender cannot skip this step. The borrower has the right to respond to the complaint, and the case proceeds as would any other court matter.
No matter how far behind in payments a borrower may be, the lender must still follow the letter of the law when pursuing foreclosure. If you are currently engaged in a foreclosure matter, consult the dedicated New York attorneys at Rubin & Licatesi, P.C. by calling 516-227-2662 or by contacting us online.