While many people trust the experts from UMoveFree to help find them a great apartment, a majority of Americans own their homes. When you own a home, you are responsible for making the mortgage payment on time every month.
Unfortunately, not everyone can always keep up with these payments. If this issue goes on long enough without a resolution, your home may become foreclosed. Despite how many foreclosures and mortgage accelerations happen in New York, few people know much about them.
This can be troubling if you are ever faced with one yourself. To help you learn more about them, this article is going to go over both the mortgage acceleration and foreclosure laws in NY.
What is Mortgage Acceleration and Foreclosure?
Before we look at the process, it is a good idea to know what these two terms are. Mortgage acceleration is when a lender essentially demands full repayment of the loan all at once. This is generally done after the loan is in default and the borrower has stopped paying. Not all mortgages can be accelerated, so be sure to look in the terms of your mortgage agreement to see if yours can.
A foreclosure is a legal process that a lender will go through to seize a home that a buyer has no longer been paying the mortgage on. The lender will then generally sell the home to recuperate the money they lent to the borrower.
What is the Foreclosure Process in New York?
Now that you know what mortgage acceleration and foreclosure are, what is the foreclosure process like in New York? Well, the process can’t officially begin until 120 days have passed without payment, as that is when a lender can file for foreclosure.
Next, is when the acceleration letter will be sent. This is when the lender will let a borrower know that the mortgage is in default. If this default is not cured, the lender will accelerate the loan, and require it be paid back in full, all at once. This notice or letter will often give you 30 days to fix the default.
Before actually starting the process of foreclosure, a lender in New York is required to send a 90-day notice to the borrower. This will give borrowers plenty of resources to help them fix the issue before a foreclosure commences. These 90 days can run at the same as the 120 mentioned above, as well.
If these 90 days pass with no action, the lender can legally go and file a complaint to foreclose your property in court. A borrower will generally have 30 days to offer a response and defense as to why they have stopped paying. If no response is given in this period, it makes defending yourself later down the line much more challenging.
At this point, the lender and their lawyer must be able to provide documents and information that prove they are entitled to do what they are doing. This is called filing for a certificate of merit. The lawyer for the lender may also file an affidavit of service, within 20 days of serving you the complaint.
Then, within 60 days of this affidavit, a mandatory settlement conference will be held. This is where both sides will try to come to terms with a settlement that works for both sides. If one can be arrived at, the process can end here.
If no settlement is agreed upon, both sides will provide and ask for documents and information to prepare the case. Some lenders may attempt to file a motion for summary judgment or default judgment, which could win the case without a trial. In some cases, a foreclosure process can include a trial, but it is quite rare. If a trial occurs, the judgment is made after the case as to how the process will progress.
You can also try to reinstate the loan before judgment in New York, which involves paying all amounts you owe, as well as any late fees or penalties. If the judgment is entered against you and no reinstatement occurs, a sale date for the property will be set, with the winning bidder paying your lender, not you.
Also, an important part of this process is the statute of limitations on foreclosures, which is six years in New York. If a lender waits too long to take action, there is a chance that borrowers can use this as a defense. The lender has six years from the first missed payments to take action.
In conclusion, we hope that this article has been able to help you become more familiar with both mortgage acceleration and foreclosure laws in NY. It can be a difficult process for everyone involved, but it is important to understand in case you ever find yourself dealing with one.