Homeowners who have trouble paying their mortgage may face the chance of foreclosure. This is a legal process that lenders use to reclaim the home when the payments aren’t being made.
In New York, foreclosure is a judicial process, so it takes place through the court system. While that adds oversight to a complex process, it also means that foreclosures can be lengthy and complicated.
Homeowners sometimes know that the foreclosure process is going to occur
Many homeowners know when they’re at risk of foreclosure. Lenders will typically send out collection notices and warnings before initiating the legal process. Once the lender determines that they need to act, they will file a summons and complaint. The homeowner is served with the paperwork and is given time to respond to it.
Any homeowner who receives these documents should respond quickly. If there isn’t an answer filed within the allotted time, the lender has the option of seeking a default judgment.
Mandatory settlement conference in New York
Typically, residential foreclosures in this state require a settlement conference within 60 days of the complaint being filed. This is an opportunity for the borrower to explore alternatives to foreclosure. These may include forbearance, loan modification or repayment plans. If no settlement is made, the court can issue a judgment and schedule a sale if the foreclosure is valid.
Foreclosure isn’t immediate, so homeowners may have months to find alternatives. Acting early may preserve some options and provide the best protection for the borrower. It’s critical to work with someone who’s familiar with these matters so they can assist with determining how to move forward.