Foreclosure Process and Laws in New York

If you're a homeowner in New York worried about foreclosure, understanding the state's foreclosure process is the first step toward protecting your home. New York foreclosure laws allow a judicial foreclosure process, which means your lender must go through the court system to foreclose on your property.

While facing a foreclosure can be stressful, New York foreclosures usually take a pretty long time, so you'll have time to fight the foreclosure or explore alternatives, like getting a loan modification. New York law specifies how foreclosures work, and both federal and state laws give you rights and protections throughout the process.

Whether you're already behind on mortgage payments or simply want to prepare for what’s ahead, knowing how foreclosure works in New York can make all the difference if you want to save your home or at least get through the process with as little stress as possible.

What Are My Foreclosure Rights in New York?

Both federal and state laws govern foreclosure procedures in New York, and your mortgage contract gives you rights during the process.

Your Mortgage Rights in New York

If you get a loan to buy residential real estate in New York, you'll likely sign two documents: a promissory note and a mortgage. The promissory note is the document that contains your promise to repay the loan along with the repayment terms. The mortgage is the document that gives the lender a security interest in the property. If you fail to make the payments, the mortgage provides the lender with the right to sell the home at a foreclosure sale to recoup the money it loaned you.

You also get rights under the promissory note and mortgage. For example, if you're late making your monthly payment, most promissory notes provide a grace period of ten to fifteen days before you'll incur late charges. To find out the grace period in your situation and the amount of the late fee, check the promissory note.

If you default on payments, most mortgages require the lender to send you a breach letter (a preforeclosure notice) before officially starting a foreclosure. This notice tells you that the loan is in default. If you don't cure the default, the lender can accelerate the loan (call it due) and proceed with the foreclosure.

Your Rights Under Federal Foreclosure Laws

In most cases, federal mortgage servicing laws require the servicer to contact you (or attempt to contact you) by phone to discuss foreclosure alternatives, called "loss mitigation" options, no later than 36 days after a missed payment and again within 36 days after each following missed payment. (12 C.F.R. § 1024.39 (2025).)

No more than 45 days after a missed payment, the servicer must let you know in writing about loss mitigation options that could be available and assign personnel to help you. There are a couple of exceptions to these requirements, like if you file for bankruptcy or tell the servicer not to contact you under the Fair Debt Collection Practices Act. (12 C.F.R. § 1024.39) (2025).)

Federal law also generally requires the servicer to wait until the loan is over 120 days delinquent before officially starting a foreclosure. But in a few situations, like if you violate a due-on-sale clause or if the servicer is joining the foreclosure action of a superior or subordinate lienholder, the foreclosure can begin sooner. (12 C.F.R. § 1024.41(2025).)

Protections If You're in the Military

If you're in the military, the federal Servicemembers Civil Relief Act provides certain legal protections against foreclosure.

Additional Foreclosure Rights in New York

In addition, you have the right to:

• get preforeclosure notices
• receive notice of the foreclosure and the opportunity to file an answer
• attend a settlement conference
• get current on past-due payments to stop the foreclosure sale
• pay off the loan to prevent a foreclosure sale, and
• get any excess proceeds ("surplus funds") following a foreclosure sale

Preforeclosure Notice Under New York Law

If the property is a borrower-occupied, one- to four-family dwelling, or a condominium unit, New York law requires the lender to send a notice at least 90 days before starting the foreclosure. The 90-day time period runs concurrently with the 120-day preforeclosure period under federal law. This notice provides, among other things:

• information about the default, and
• a list of government-approved housing counseling agencies located near you that provide free counseling. (N.Y. Real Prop. Acts. Law § 1304 (2025).)

If the lender or servicer doesn't send the 90-day notice or doesn't strictly comply with its requirements, you could have a defense that might result in a dismissal of the foreclosure action. Consider talking to a lawyer to get specific advice about your situation if you think the lender or servicer didn't follow the 90-day notice law.

State Foreclosure Laws in New York

Approximately half of the states, including New York, require the lender to file a lawsuit in court to foreclose. The lender gives notice of the suit by serving you a summons and complaint, along with information about the foreclosure process. (N.Y. Real Prop. Acts. Law § 1303, § 1320 (2025).) You typically get:

• 20 days to file an answer with the court, if the complaint and summons are served in person, or
• 30 days, if service is by mail or another method.

New York Requires the Lender to Assert Standing When Starting a Foreclosure

Under New York law, any foreclosure complaint initiated on a residential mortgage covering a one- to four-family dwelling after the law's effective date must contain an affirmative allegation that the plaintiff (the party initiating the lawsuit, which is usually the lender or loan servicer in a foreclosure) has "standing."

Specifically, New York law requires the plaintiff to say in the complaint for foreclosure that it is the owner and holder of the subject mortgage and promissory note, or that it has been delegated the authority to start a mortgage foreclosure action by the owner and holder of the mortgage and note. (N.Y. Real Prop. Acts. Law § 1302 (2025).)

The plaintiff must also state in the complaint that it has complied with certain provisions of New York's existing foreclosure laws.

Foreclosure Settlement Conferences in New York

After the foreclosure begins, for borrower-occupied properties, the court will schedule a foreclosure settlement conference to take place within 60 days after the lender files proof of service with the court clerk. The conference aims to provide an opportunity to work out an agreement to avoid foreclosure, like a loan modification.

The court will notify the parties of the time and place of the settlement conference and the documents they should bring to the meeting. (N.Y. Civil Practice Rule 3408 (2025).)

State law says that if the homeowner appears at the settlement hearing pro se (without a lawyer), the court should consider it a motion to proceed as "a poor person." The judge is then supposed to figure out whether the homeowner can go through the foreclosure process unrepresented or if the court should appoint a lawyer to help the homeowner. (N.Y. Civil Practice Rule 3408 (2025).) However, a proposed class action lawsuit filed on June 7, 2023, claimed that courts failed to implement this rule. The case settled, and the New York State Office of Court Administration (OCA) agreed to implement the state law's protections for homeowners across New York State.

What Happens If You Do or Don’t File an Answer

If you can't work out a way to avoid foreclosure at the settlement conference, and you fail to answer the court action, the lender can get a default judgment from the court. The judgment will give the lender permission to hold a foreclosure sale.

If you respond to the lawsuit, however, the case will go through the litigation process. The lender might then request the court to grant summary judgment. A summary judgment motion asks that the court grant judgment in favor of the lender because there’s no dispute about the critical aspects of the case.

If the court grants summary judgment for the lender or you lose at trial, the judge will order the home sold at a foreclosure sale.

Notice About the Foreclosure Sale

If the lender gets a final judgment of foreclosure against you, a sale date is set. Notice of the sale is published in a newspaper and posted publicly (in some cases). (N.Y. Real Prop. Acts. Law § 231 (2025).)

Foreclosure Sale

The process ends with a foreclosure sale. The lender usually makes a bid on the property using what’s called a "credit bid" rather than bidding cash. With a credit bid, the lender gets a credit up to the amount of the borrower’s debt. The highest bidder at the sale becomes the new owner of the property.

If the sale results in surplus funds (more than what you owe on the mortgage and other liens), you can make a claim for that money.

What Options Are Available to Borrowers During Foreclosure?

You might be able to prevent a foreclosure sale by reinstating the loan (in some cases), redeeming the property before the sale, filing for bankruptcy, or working out a loss mitigation option, like a loan modification, short sale, or deed in lieu of foreclosure.

Reinstating the Mortgage Before the Foreclosure Sale in New York

"Reinstating" is when you catch up on the missed payments, plus fees and costs, to stop a foreclosure. Under New York law, you may reinstate the loan at any time prior to final judgment, and then the case will be dismissed. Or you could pay the arrearage after judgment, but before the sale, and the proceedings will be stayed (postponed). If you later default again, then the court can order enforcement of the judgment. (N.Y. Real Prop. Acts. Law § 1341 (2025).)

Redemption Period After a Foreclosure Sale in New York

In all states, you get the right to redeem the property before a foreclosure sale by paying off the entire mortgage loan. However, in practice, borrowers rarely redeem prior to a foreclosure sale. Most homeowners facing foreclosure lack the financial means to pay off the entire loan balance, plus additional fees and costs.

Some states have a law that gives a foreclosed homeowner time after the foreclosure sale to redeem the property. New York law, however, doesn’t provide a post-sale redemption period. New York law requires conveyance to the buyer after the foreclosure sale. (N.Y. Real Prop. Acts. Law § 1353 (2025).)

Filing for Bankruptcy

If you're facing a foreclosure, filing for bankruptcy might help. Once you file for bankruptcy, something called an "automatic stay" goes into effect. The stay functions as an injunction prohibiting the lender from foreclosing on your home or trying to collect its debt, at least temporarily.

In many cases, filing for Chapter 7 bankruptcy can delay the foreclosure by a matter of months and eliminate other debts. But if you're behind in mortgage payments when you file, you won't be able to keep your home. To stay in your house, you must be current on payments and be able to protect your equity with an exemption. However, you won't owe anything after foreclosure because Chapter 7 erases mortgage debt.

If you want to save your home and you're behind in payments, filing for Chapter 13 bankruptcy might be the answer. To find out about the options available, speak with a local bankruptcy attorney.

Deficiency Judgments Following a Foreclosure Sale in New York

Sometimes, a foreclosure sale doesn’t bring in enough money to pay off the full amount owed on the loan. The difference between the sale price and the total debt is called a "deficiency balance." Many states, including New York, allow the lender to get a personal judgment, called a "deficiency judgment," for this amount against the borrower.

In New York, the lender can get a deficiency judgment if you’re served the complaint and summons personally, or you appear in the foreclosure action. To get the deficiency judgment, the lender must make a motion with the court within 90 days of the consummation of the sale. (The sale is consummated when the deed is delivered to the purchaser.) (N.Y. Real Prop. Acts. Law § 1371 (2025).)

The amount of the deficiency is limited to the total amount of the debt minus the higher of either the fair market value or the sales price. (N.Y. Real Prop. Acts. Law § 1371).

Statute of Limitations for New York Foreclosures

The statute of limitations for foreclosure in New York is six-years. (N.Y. C.P.L.R. § 213 (2025).)

What Is the Foreclosure Abuse Prevention Act in New York?

The Foreclosure Abuse Prevention Act (Senate Bill S5473), is a key piece of legislation that reshaped New York’s foreclosure laws. Enacted on December 30, 2022, the law limits when and how the six-year statute of limitations in mortgage foreclosure cases can be paused or restarted.

Under the Foreclosure Abuse Prevention Act, if a lender unilaterally voluntarily withdraws a foreclosure lawsuit, discontinues the foreclosure action, or sends a de-acceleration letter, it doesn't reset the six-year clock for enforcing the loan. This means that once a mortgage is accelerated (usually when the lender demands full repayment due to default), the lender typically has six years to foreclose. If they don’t act within that time, they’re barred from doing so. (But a loss mitigation agreement, such as a loan modification, might require the borrower to agree to reset and extend the limitations period.)

Importantly, the law applies retroactively. It covers foreclosure cases filed before the law took effect, as long as a final judgment and order of sale hadn’t yet been enforced.

What Are the Possible Consequences of Foreclosure?

The main consequence of foreclosure, other than losing your home, is that your credit scores will fall. The foreclosure will remain in your credit history for seven years, making it challenging to get future loans or credit at a low interest rate.

Also, in some cases, you might face a deficiency judgment (see above) if the foreclosure sale doesn't cover the outstanding debt. You might also have trouble finding new housing because of your credit history.

Resources for New York Homeowners Facing Foreclosure

New York’s Homeowner Protection Program (HOPP), 855-466-3456, connects homeowners with free housing counselors and legal services statewide. A HUD-approved housing counselor can provide helpful information (at no cost) about various alternatives to foreclosure. The New York State Department of Financial Services provides information for homeowners facing foreclosure.

Getting Help from a New York Foreclosure Lawyer

Foreclosure laws are complicated. Servicers and lenders sometimes make errors or forget steps. If you think your servicer or lender failed to complete a required step, made a mistake, or violated state or federal foreclosure laws, you might have a defense that could force a restart to the foreclosure or you might have leverage to work out an alternative.

Consider talking to a local foreclosure attorney or legal aid office to learn about your rights. A lawyer can also tell you about different ways to avoid foreclosure.