Facing a foreclosure can be overwhelming. Fortunately, there are steps you can take to prevent the loss of your dream home. Since New York is a judicial foreclosure state, you have significant legal protections and multiple opportunities to save your property. It is crucial to follow these processes so you can safeguard your residence while minimizing the financial impact of a foreclosure.
Act early and communicate
As soon as you realize you cannot make a payment, contact your lender’s loss mitigation department. They may offer you a temporary forbearance or a repayment plan before legal action begins.
Understand the 90-Day Notice
In New York, lenders have a legal duty to send you a specific Pre-Foreclosure Notice at least 90 days before filing a lawsuit. This document provides a list of government-approved housing counseling agencies. You can use that timeframe to consult with a professional.
Attend mandatory settlement conferences (MSC)
Once a foreclosure action is filed in court, state law requires that you, the lender and your lawyers meet with a neutral third party in an MSC. This is a session where all involved parties meet under court supervision to discuss the current dispute and potentially resolve the case.
You must attend these sessions to protect your rights while your legal representation can help you negotiate on a final agreement. If there is no such outcome reached, you may need to prepare for an upcoming trial.
File a formal response
After receiving a Summons and Complaint, you typically have to file a formal Answer with the court within 20 to 30 days. Failing to submit this document can allow the lender to expedite a default judgment order, stripping you of your ability to contest the foreclosure.
Beware of scams
No matter how anxious you feel, it is important to be wary of any foreclosure rescue companies that demand upfront fees. In New York, it is generally illegal for these businesses to charge an initial payment for their services.
Finding hope in a hard situation
While you have rights as a homeowner, they are time-sensitive when you are facing foreclosure. Seeking legal guidance can help you get the prompt assistance needed to protect your property and your equity.
