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Understanding New York State's Mortgage Foreclosure Process

What is "Foreclosure"?
Foreclosure is when a lawsuit is filed against a homeowner in the supreme court where the property is located.  The mortgage holder is usually a bank or finance company.

New York is a judicial foreclosure state, which means that the lender has to sue the borrower in order to enforce their rights under the mortgage and note. If the lender wins the lawsuit, it obtains a judgment from the court, which allows the lender to sell the property at an auction.  The money received from the sale is used to repay the debt.

Pre-Foreclosure Steps:
The Acceleration letter: Before filling a foreclosure against a homeowner, a lender must send an Acceleration Letter to the borrower. The letter tells the borrower that the lender will accelerate the entire amount of the mortgage if the arrears (total amount overdue and penalties) are not paid by a certain date.  The Acceleration Letter is sent to the borrower after the borrower defaults on the loan. A borrower is usually considered in default on a loan after missing one payment, though the Acceleration Letter is often not sent until the borrower is 2 to 3 months in default.
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Understanding New York State’s Mortgage Foreclosure Process