New York foreclosure laws: how the process works and how long it takes

Automatic — the plaintiff must file proof of service within 20 days of service, and the court must hold the initial settlement conference within 60 days after that proof of service is filed with the county clerk, or on an adjourned date the parties agree to. No referral is required. The court sends the parties a notice of the conference's time and place. Applies to: Residential foreclosure actions involving a home loan on a 1-4 family dwelling or condominium unit that is or will be the borrower's principal dwelling, where the defendant lives in the property. For a reverse mortgage in default because the last surviving borrower died, the conference applies only if that borrower's spouse lives in the property, or if a successor in interest who owns or claims the property by will or inheritance lived there when the borrower died. Does NOT apply to investment properties, commercial properties, or vacant land. More on the Mandatory Settlement Conference Program (CPLR 3408).

If part of your principal or interest is due and a later part is not yet due, you can pay the amount due, case costs and any expenses of the sale proceedings into court before the sale. The court dismisses the case before judgment, or stays it after judgment but before sale. Other catch-up rights depend on your mortgage. Source RPAPL § 1341

CPLR 3408 limits dual tracking during the mandatory settlement conference process: motions by either side are held in abeyance while the conference process is ongoing (except motions about compliance with CPLR 3408), and avoiding prosecution of the foreclosure while loss mitigation applications are pending is one factor in whether a party negotiated in good faith. When 12 C.F.R. § 1024.41 applies to a mortgage secured by the borrower's principal residence and a borrower submits a timely complete loss-mitigation application, additional pre-filing and sale protections depend on the timing and conditions in 12 C.F.R. § 1024.41(f)(2) and (g). Regulation X does not require a servicer to offer any particular loss-mitigation option. Source CPLR § 3408(f)(3), (n)

Under CPLR 3408, a mandatory settlement conference is held in residential foreclosure actions involving a home loan where the defendant lives in the property, with limits for reverse mortgages after the last borrower dies. Both parties must negotiate in good faith, and the lender must bring its payment history, a description of any loss mitigation options that may be available, and, if it has evaluated or is evaluating the borrower for a modification, a summary of that review and the reasons for any denial. Courts can order remedies against lenders who fail to negotiate in good faith, but neither side's failure to make or accept an offer is enough on its own to show bad faith. Source CPLR § 3408

Written notice (RPAPL 1304 — 90-day pre-foreclosure notice). For a principal-residence mortgage serviced by a servicer subject to 12 CFR 1024.39 and absent an applicable exception, the federal rule generally requires live-contact efforts by the 36th day of delinquency and written early-intervention notice by the 45th day. Source RPAPL §§ 1304, 1306

New York's signature borrower protection. Requires lender to send a specific notice at least 90 days before commencing foreclosure, with a list of housing counseling agencies, in at least 14-point font, by both certified and first-class mail. The notice is a condition precedent to starting a foreclosure, and a violation of RPAPL 1304 is a defense to the foreclosure (RPAPL 1302). Source RPAPL § 1304

Court must hold a settlement conference in residential foreclosure actions involving a home loan where the homeowner lives in the property. Both parties must negotiate in good faith. Lender must send a representative with authority to dispose of the case. Failure to negotiate in good faith can result in sanctions against the lender. Source CPLR § 3408

Lender must apply for deficiency within 90 days of deed delivery. Court determines fair market value — deficiency is calculated against the HIGHER of sale price or fair market value. This prevents lenders from lowballing the sale price to inflate the deficiency. Source RPAPL § 1371

Requires mortgagees and their servicers to inspect, secure and maintain vacant and abandoned homes, with an exemption for lenders with a small share of the state's mortgage market. Subject to exceptions such as bankruptcy or active loss mitigation, the servicer must inspect the property's exterior within 90 days after the loan becomes delinquent and every 25-35 days after that; if the home is vacant and abandoned, it must post a notice and then secure and maintain the property. The DFS maintains a registry of vacant foreclosure properties. Violations are enforceable by municipalities and DFS, with civil penalties of up to $500 per day per property. Source RPAPL §§ 1308, 1309, 1310

Available to all New York homeowners facing foreclosure or financial hardship. Provides free housing counseling and legal assistance through a network of HUD-approved agencies and legal services providers across the state. More on Homeowner Protection Program (HOPP).

State law requires the parties in a residential foreclosure court case to negotiate in good faith at a mandatory settlement conference, according to the New York Department of Financial Services. Ask the court or a legal aid provider about scheduling in a specific case. More on Residential foreclosure settlement conferences.