New York is a judicial foreclosure state, which means a lender has to go through the court to foreclose on a home. The process has several required steps and often takes many months to well over a year, so homeowners usually have more time and more options than they think. What you can do depends on your loan, how far along the case is, and how much equity you have.
This guide is general information, not legal advice. Every situation is different. For advice about your case, talk to a licensed New York attorney or a HUD-approved housing counselor.
After payments are missed, the lender will contact you. For many home loans, New York requires the lender to send a 90-day notice before it can start a foreclosure case. It explains the amount owed and lists free housing counseling resources. Read it carefully. It has deadlines and phone numbers in it.
If the loan isn't brought current, the lender files a foreclosure action in court. You'll be served with a summons and complaint, along with a notice that explains your rights as a homeowner. Responding on time matters. Ignoring court papers can speed up the case against you.
In most residential foreclosures on owner-occupied homes, New York courts schedule a mandatory settlement conference. The lender and homeowner meet, often with a court referee or housing counselor present, to discuss alternatives to losing the home. This is one of the best moments to explore a loan modification, repayment plan, or a sale.
If no resolution is reached, the court can issue a judgment of foreclosure and appoint a referee to sell the property at a public auction. You'll receive notice of the sale date.
Up until the auction, a homeowner can generally pay off what's owed, or sell the home and use the proceeds to pay the lender. If the home sells at auction for more than the debt, the surplus belongs to the owner after costs and liens are paid, and the owner has to claim it through the court. After the auction, the process of recovering a surplus can be slow, which is why many people choose to act earlier.
| Option | What it is | Good fit when | Watch out for |
|---|---|---|---|
| Catch up / repayment plan | Pay missed amounts over time | Short-term hardship, income recovering | Needs lender approval |
| Loan modification | Change loan terms | Can afford a lower payment long term | Not guaranteed; paperwork heavy |
| Sell on the open market | List with an agent | Home is in good shape, enough time | Showings, repairs, inspections and buyer financing can take months |
| Sell for cash | Sell directly to a cash buyer | Time is short, home needs work, or you want certainty | Cash offers are usually below retail value in exchange for speed and no repairs |
| Short sale | Sell for less than owed, with lender approval | Owe more than the home is worth | Lender approval takes time; credit impact |
| Let it proceed | Allow the auction | Little or no equity and a plan to relocate | Credit damage; possible deficiency |
A note about cash buyers: Be cautious with anyone who asks you to sign over your deed, pay large upfront fees, or promises to "save your home" for a price. New York has specific laws protecting homeowners in foreclosure. A legitimate buyer will put terms in writing, give you time to review them, and let you talk to your own lawyer or counselor first. Compare more than one offer.
How long does foreclosure take in New York?
It varies by case, but New York's court-based process often takes many months to well over a year from the first missed payment to a sale.
Can I sell my house while it's in foreclosure?
Generally yes. You can sell until the property is sold at auction, as long as the sale proceeds cover what's owed or the lender approves a short sale. Starting earlier gives you more choices.
Will I lose all my equity in a foreclosure?
Not necessarily, but fees, interest and costs add up as the case continues. If there's a surplus after an auction, it goes to the owner through the court, but that can take time to recover.
What is a settlement conference?
A court-scheduled meeting between you and your lender to look for an alternative to foreclosure, such as a modification. It's mandatory in many residential cases.
What happens if I ignore the court papers?
The case can move forward without your input, and you can lose chances to raise defenses or negotiate. Respond by the deadline on the papers.
Does a cash offer stop the foreclosure?
Not by itself. A completed sale that pays off the loan before the auction ends the foreclosure. The timeline needs to work, and the sale must actually close.
Use the button at the top of this page to start. It takes about a minute, there is nothing to sign to get an offer, and you can always compare it with listing or with other buyers.
The Key Buyers · 194 Jericho Tpke, Floral Park, NY 11001 · 516-366-2592. Information on this page is general and may not reflect recent changes in the law.