{"id":36213,"date":"2019-10-01T15:55:36","date_gmt":"2019-10-01T12:55:36","guid":{"rendered":"https:\/\/www.propertyshark.com\/Real-Estate-Reports\/?p=36213"},"modified":"2025-05-22T13:09:37","modified_gmt":"2025-05-22T10:09:37","slug":"understanding-new-yorks-foreclosure-process","status":"publish","type":"post","link":"https:\/\/www.propertyshark.com\/Real-Estate-Reports\/2019\/10\/01\/understanding-new-yorks-foreclosure-process\/","title":{"rendered":"Understanding New York\u2019s Foreclosure Process"},"content":{"rendered":"

NYC-based\u00a0boutique law firm\u00a0Pardalis & Nohavicka<\/a>\u00a0brings the latest legal updates from the world of real estate to PropertyShark.\u00a0Pardalis & Nohavicka\u00a0handles an eclectic array of matters, representing individuals and business owners in civil litigation, criminal cases and business transactions,\u00a0currently litigating and representing clients throughout the United States and around the world.<\/em><\/strong><\/p>\n

The foreclosure process can be daunting and painfully intricate. Here\u2019s what you need to know about the process.<\/p>\n

<\/span>Foreclosure Methods <\/strong><\/span><\/h3>\n

There are two ways\u00a0a\u00a0lender\u00a0can foreclose a mortgaged\u00a0property: a judicial foreclosure\u00a0through the\u00a0court\u00a0system or a\u00a0non-judicial foreclosure\u00a0without a court order.\u00a0For this article, we\u2019ll focus only on the\u00a0judicial foreclosure process, which is both more common and more complex.<\/p>\n

<\/span>Default Notice Requirement<\/strong><\/span><\/h3>\n

One of the\u00a0most important\u00a0requirements\u00a0for the foreclosure\u00a0process\u00a0is the\u00a0Pre-Foreclosure\u00a0Default\u00a0Notice. RPAPL\u00a0\u00a71304 states that a lender must provide a minimum of 90 days with a detailed notice to the borrower that the lender will take legal action on their failure to make a mortgage payment, as part of the NYC pre-foreclosure<\/a> process.<\/p>\n

For example, if the default is\u00a0due to\u00a0delayed payment, it must include:\u00a0the number of days the payment\u00a0is\u00a0delayed, the amount due and when it must be paid.\u00a0<\/strong>There\u00a0<\/strong>must also be a list of\u00a0at least five recommended, government-approved, local counseling agencies, which will\u00a0provide a convenience for the mortgagor to counsel in his\/her area. Failing to include such detailed information typically leads to the motion for foreclosure and sale to be denied.<\/p>\n

<\/span>Who Should Receive the Notice<\/strong><\/span><\/h3>\n

The law is very particular as to whom the default notice should be sent to. The lender may only send the notice to an actual borrower who is listed on the Note and Mortgage \u2013 as opposed to occupants of the property or anyone else.<\/p>\n

RPAPL\u00a0\u00a71304 may not be applied to someone other than the borrower, including the borrower\u2019s spouse\u00a0if they did not sign the note. In US Bank v. Hasan<\/em>, the court held that \u201c… the notice need only be sent to a \u2018borrower.\u2019 While the statute does not define the term, logic dictates that a \u2018borrower\u2019 is someone who, at a minimum, either received something and\/or is responsible to return it.\u201d<\/p>\n

Another question to ask is\u00a0whether\u00a0the notice provisions of RPAPL\u00a0\u00a71304\u00a0should\u00a0still\u00a0apply when the borrower is deceased. In The Bank of New York Mellon v. Ana Roman as Ex\u2019r of the Estate of Pablo Roman, <\/em>the\u00a0<\/em>motion\u00a0<\/em>found that such notice requirement is not required if the borrower is deceased.<\/p>\n

The purpose\u00a0of these two rules is\u00a0to aid the homeowner in an attempt to avoid litigation.\u00a0In the\u00a0Aurora<\/em>\u00a0<\/em>case,<\/em>\u00a0the court opinion mentioned,\u00a0\u201cThe legislative history\u00a0noted a\u00a0typical lack of communication between distressed homeowners and their lenders prior to the commencement of litigation, leading to needless foreclosure proceedings.\u201d<\/p>\n

Consequently, the default notice aims to provide a standardized, mandatory mechanism for both parties to communicate\u00a0prior to\u00a0any foreclosure action. This makes it\u00a0one of the\u00a0most important requirements\u00a0in the foreclosure process.<\/p>\n

<\/span>Physical Possession of Original Promissory Note<\/strong><\/span><\/h3>\n

It\u2019s also important for borrowers to know that their mortgage may be assigned to other, third-party lenders. This means that if a borrower takes out a loan with one bank, that loan may later be assigned to another bank. This is legal and very common in New York.<\/p>\n

The third-party lender is known as the \u201cassignee.\u201d In order to initiate the foreclosure in NYC<\/a>,\u00a0the assignee\u00a0must prove that it has physical possession of the note \u2013 prior to the commencement of proceedings. Such standing can be demonstrated by attaching a copy of the bank-endorsed note to the complaint.\u00a0The borrower may examine the note to confirm it is original.<\/p>\n

If the Lender or Assignee did not annex the copy of the note to the complaint, some courts hold that he is required to prove its physical possession by an affidavit with the specific date of delivery of the note to the Lender. Similar to the default notice\u00a0requirement, this mechanism is intended to\u00a0better\u00a0protect the\u00a0mortgagor\u2019s\u00a0position.<\/p>\n

These requirements are critical to comply with the foreclosure process for the plaintiff. Ultimately, this will influence the motion for the foreclosure and whether the sale is granted or denied.<\/p>\n

<\/span>About:<\/strong><\/span><\/h4>\n

\"\"<\/a>Taso Pardalis<\/strong>\u00a0is a founding partner of the Law Offices of Pardalis and Nohavicka, a leading full- service NYC law firm with offices in Manhattan, Queens and WeWork. Taso may be a well-known attorney with many cases making headlines in major media outlets, but at heart, he is a true entrepreneur that believes in supporting the small business community. His areas of concentration are: Intellectual Property, Trademarks, Corporate, Business Law and Real Estate Law.
\n______________<\/p>\n

\"\"<\/a><\/strong>Real Estate and Corporate Transactions Attorney\u00a0Nataly Goldstein<\/strong>\u00a0<\/a>is a graduate of Cardozo School of Law, where she served as\u00a0President of the Real Estate Law Association.\u00a0 She is experienced in both residential and commercial real estate transactions, as well as representing large banks, such as Wells Fargo and Citibank.<\/em><\/p>\n

______________<\/p>\n

\"\"<\/a><\/p>\n

Jiayue (Arcee) Wang<\/strong> is a legal intern at Pardalis & Nohavicka. She obtained her LL.M. degree with Honors from Northwestern Pritzker School of Law’s class of 2019. Jiayue graduated from China University of Political Science and Law (CUPL) with an LL.B. degree, and now expecting to obtain her second LL.M. degree from CUPL in 2020. She has various interning experience in litigation, arbitration, and corporation in both China and the U.S.\u00a0<\/em><\/p>\n

 <\/p>\n

 <\/p>\n","protected":false},"excerpt":{"rendered":"

NYC-based\u00a0boutique law firm\u00a0Pardalis & Nohavicka\u00a0brings the latest legal updates from the world of real estate to PropertyShark.\u00a0Pardalis & Nohavicka\u00a0handles an eclectic array of matters, representing individuals and business owners in civil litigation, criminal cases and business transactions,\u00a0currently litigating and representing clients throughout the United States and around the world. The foreclosure process can be daunting…<\/p>\n","protected":false},"author":49,"featured_media":36214,"comment_status":"closed","ping_status":"open","sticky":false,"template":"","format":"standard","meta":{"_jetpack_memberships_contains_paid_content":false,"footnotes":""},"categories":[9499,283,328,796],"tags":[11172],"class_list":["post-36213","post","type-post","status-publish","format-standard","has-post-thumbnail","hentry","category-legal","category-new-york-foreclosures","category-new-york-real-estate","category-how-to","tag-old-how-to"],"yoast_head":"\nUnderstanding New York\u2019s Foreclosure Process - PropertyShark Real Estate Blog<\/title>\n<meta name=\"robots\" content=\"index, follow, max-snippet:-1, max-image-preview:large, max-video-preview:-1\" \/>\n<link rel=\"canonical\" href=\"https:\/\/www.propertyshark.com\/Real-Estate-Reports\/2019\/10\/01\/understanding-new-yorks-foreclosure-process\/\" \/>\n<meta property=\"og:locale\" content=\"en_US\" \/>\n<meta property=\"og:type\" content=\"article\" \/>\n<meta property=\"og:title\" content=\"Understanding New York\u2019s Foreclosure Process\" \/>\n<meta property=\"og:description\" content=\"NYC-based\u00a0boutique law firm\u00a0Pardalis & Nohavicka\u00a0brings the latest legal updates from the world of real estate to PropertyShark.\u00a0Pardalis & Nohavicka\u00a0handles an eclectic array of matters, representing individuals and business owners in civil litigation, criminal cases and business transactions,\u00a0currently litigating and representing clients throughout the United States and around the world. 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