The Foreclosure Process

90 Day Pre-Foreclosure Filing Notice:  Under New York State law, the lender must send the borrower a notice at least 90 days before filing a foreclosure summons and complaint.  The notice must have specific language and must attach at least 5 non-profit housing counseling agencies located near the borrower.  

A foreclosure is a lawsuit that the bank/lender or mortgage holder files against a homeowner in the Supreme Court of New York where the property is located.  New York is a judicial foreclosure state, which means that the banker/lender must sue the homeowner in order to enforce their right under the mortgage and note.

Step 1 - the bank/lender commences the lawsuit by filing a summons and complaint.  The summons and complaint is generally filed in tandem with the a "lis pendens" in court.  The lis pendens puts the public on notice that the subject property is in litigation.  

Step 2 - the lender files an Affidavit of Service with the court, which sets the date and states how it served the homeowner/borrower.  At this time the lender must file a Request for Judicial Intervention (RJI) with the court to notify the court that it must schedule a mandatory settlement conference.  The lender also must file an Attorney Affirmation with the court.  

Step 3 - the most important step in the foreclosure process!  The borrower must file an answer to the bank's summons and complaint.  Depending on the summons and complaint are served, the borrower has 20 - 30 days to file the Answer.  It is imperative that the homeowner/borrow file the Answer within the allotted time, failure to do so would place the borrower in default.  This is the most critical part of the foreclosure process and we cannot express the importance of filing a timely Answer to the summons an complaint.  Allow our foreclosure bankruptcy lawyers to assist you in filing an Answer and raising affirmative defenses. 

Step 4 - within 60 days of filing the Affidavit of Service, the court must hold a settlement conference to see if the bank/lender and the homeowner can come to a mutual resolution in the foreclosure process.  The court will send the homeowner/borrower a notice of the settlement conference.  This settlement conference is held before a referee not a judge.  The settlement negotiations conducted through the foreclosure settlement part may yield a re-instatement, forbearance or modification.  If the parties are able to reach a final resolution the lender will file a discontinuance of the action (meaning it will end the current suit). If a resolution is not reached , the referee will release the case from the settlement part and the case will move forward through the foreclosure process.

Step 5 - if released from the settlement part, the case will move to litigation and the discovery phase of the process will commence.  Discovery is a process that permits both parties to a lawsuit to request documents and statements from each other.

Step 6 - after or before Discovery, the lender/bank may make a motion for Summary Judgment.  Subsequent to the Summary Judgment, the bank will file an Order of Reference and when granted, will then move for Judgment of Foreclosure and Sale.  After the judge signs the Judgment of Foreclosure and Sale, the lender/bank will publish a notice (if borrower/homeowner filed an Answer or a notice of appearance) about the auction in a newspaper at least 30 days before the aution date.