When you fall behind on your mortgage payments, you can expect most lenders to react quickly. Below is a general time line of what may occur following your first late payment and ending in foreclosure.
Day 1-15: A mortgage payment is missed.
Day 16-30: A late charge is assessed on payment. The loan servicer (the company that processes your mortgage payments) will send you a notice or otherwise attempt to make contact with you.
Day 30-60+: If your mortgage is for a home you live in, the lender or loan servicer must send you a pre-foreclosure notice at least 90 days before commencing foreclosure. This 90-day window gives you the opportunity to try to work with your lender to find an alternative to foreclosure. The notice must tell you how much you must pay to bring the loan current. It must also give you the names and telephone numbers of at least five government approved not-for-profit housing counseling agencies serving the region where you reside.
Day 45-60: The loan servicer will send a "demand" or "breach" letter pointing out that terms of the mortgage have been violated. You will be given 30 days to pay the delinquent amount and the late charge.
Day 90+: The servicer will begin the process of bringing a legal action for foreclosure. This may include referring the loan to its foreclosure department, hiring an attorney to initiate foreclosure proceedings, recording a formal notice of foreclosure or “lis pendens” with the court and serving you with notice of the action through a “summons and complaint.” These proceedings can take 7-9 months.
Once a summons and complaint has been served on you and the lender files proof of service with the court, the court is required to schedule a settlement conference within 60 days. This is an opportunity for you to meet face to face with your lender or lender’s representative to reach a resolution of the case. You should try to meet with a housing counselor or attorney prior to the conference. You should bring proof of income such as your two most recent pay stubs and most recent tax return to the conference.
You will also have to respond to the summons and complaint. If you do not respond, the court can rule against you and schedule a foreclosure sale. If you do respond, the court will rule on whether a foreclosure can occur based on the evidence presented. If the court rules against the borrower (you) a foreclosure sale is scheduled.
The sale usually occurs at least 4 months after the court ruling. A notice of sale is published in a general circulation newspaper once a week for at least 4 weeks prior to the sale.
The foreclosure process in New York currently takes about 445 days (15 months) from the date of the first missed payment to the sale of the home.
Foreclosure sales in New York are by public auction, usually at a county courthouse. The home is sold to the highest bidder and anyone, including the lender, may bid. Once payment is made and the sale is complete the winning bidder takes ownership of the property.
Once a sale is complete, you have no right of redemption. You lose your house.