New York is one of the states in the US with a long foreclosure timeline. As of 2016, the timeline averaged just less than three years. If you are a homeowner in New York and facing the risk of losing your home to foreclosure, we are here to help. This article will inform you of what to expect in the foreclosure starting from when you miss your first payment to when you are evicted. We will also inform you of your rights during the process, therefore, help you stop foreclosure NY.
Mortgage Loans in New York
When you get a loan to buy a home in New York, you will sign a mortgage and a promissory note. The promissory note is, in other words, an I owe you, which contains the terms of the loan and a promise to repay it. The promissory note is evidence that you took out the loan, and the mortgage provides security for the loan.
What Happens When You Miss a Payment
Most loans on properties have a grace period of fifteen days in case you miss a payment. After this period, the financiers of the loan will consider if they should penalize you with a late fee. The late fee is 2% of the principal payment and interest that is overdue based on the terms of the promissory note. You can find out the grace period of your loan and the late charge from the promissory note you signed. Your monthly mortgage statement also contains this information.
What to Expect When You Fall Behind in a Few Payments
You will receive a few letters from your mortgage servicer in case you miss a few mortgage payments reminding you to make the payments. The servicer may also call you to collect the overdue payment. When you receive these letters or phone calls, do not make the mistake of ignoring them. Those communications create a good opportunity to attempt and work out an agreement such as a payment plan, forbearance, or loan modification and discuss loan mitigation options helping you avoid foreclosure.
Pre-Foreclosure Loss Mitigation Review Period
The law requires that a mortgage servicer wait until more than 120 days have passed and you have not made payments for him or her to file a case in court to begin foreclosure. The 120 days gives you the opportunity to explore ways of mitigating loss. During this period, the servicer can send you notices explaining your loss mitigation options and reminding you that you are late in payments.
There is a clause in New York mortgages that requires the servicer to send you a demand letter or breach letter. This notice is sent to inform you that you have defaulted on your loan before proceeding with foreclosure. The breach letter must specify:
– The action required to remedy the default.
– The default.
– A date by which the default must be remedied, which is usually not less than 30 days from the date you are issued with the notice.
– The fact that failure to remedy the default on or before the date indicated on the breach letter may lead to the debt being accelerated and to the sale of your property.
New York law requires that the servicer or lender send a notice to the homeowner 90 days before the start of the foreclosure if the property is still owner-occupied. The notice should provide:
– A list containing housing counseling agencies located near you that are government approved.
– Information on how to cure the default.
The foreclosure will begin in case a period of 90 days from the date of mailing the notice elapses and nothing has been done by the homeowner to remedy the default. The lender can start the foreclosure earlier in case the homeowner moves out of the house, therefore, meaning that it is not his or her primary residence.
New York Foreclosure
Foreclosures in New York are judicial, meaning the servicer has to file a case in state court. The foreclosure is initiated by the lender when he or she files a complaint with the court. The borrower is served with the complaint and summons providing a period of 20 days for him or her to file an answer if they were delivered in person, or 30 days if it was done by mail. On top of that, the borrower is also served a notice called Help for Homeowners. This notice is served to inform the homeowner of his or her rights during the whole process.
You can discuss ways to avoid foreclosure in a settlement conference. It is required by New York law that a mandatory conference is held within 60 days of filing the proof of service with the clerk of the court. The conference is meant to help the homeowner and lender attempt to reach an agreement to avoid foreclosure.
Losing your home to foreclosure is painful. But with our help, you can stop foreclosure NY and avoid losing our home. Contact us today for more information.