New York Foreclosure Process: A Hudson Valley Homeowner's Complete Guide

Foreclosure in New York runs through the courts, and the paperwork has its own vocabulary: 90-day notice, notice of pendency, RJI, 3408 conference, referee, judgment of foreclosure and sale. When you understand what each document means and what it asks of you, the process becomes much easier to manage. This guide follows a Westchester, Rockland or Putnam homeowner through each stage, using the documents you will actually receive as the signposts.

We are cash buyers, not lawyers, so treat this as a map and not as advice for your case. The free hotline and legal aid listed below can look at your own papers.

Stage by Stage: What Arrives and When

1. Late notices and calls from the servicer. After a missed payment the servicer starts calling and writing. Under federal mortgage servicing rules, it generally cannot make the first foreclosure filing until the loan is more than 120 days past due, and it must review a complete loss-mitigation application you submit in time. Send one. It is the paperwork that opens the door to a modification, repayment plan or forbearance.
2. The 90-day notice (RPAPL §1304). An envelope by certified or registered mail, plus a copy by regular mail, warning that you could lose your home and listing at least five housing counseling agencies in your region. The lender must wait at least 90 days after mailing it before starting a lawsuit. Keep the envelope; whether this notice was sent correctly can matter later in court.
3. Summons, complaint and the notice of pendency. The lawsuit is filed in State Supreme Court in your county: Westchester's sits in White Plains, Rockland's in New City and Putnam's in Carmel. At the same time the lender files a notice of pendency with the County Clerk, which tells the world the house is the subject of a foreclosure. The papers you are served must include a separate notice titled "Help for Homeowners in Foreclosure" (RPAPL §1303).
4. Your answer. Generally 20 days if you were personally handed the papers and 30 days if they were served another way. An answer keeps your defenses alive. Common ones include a defective 90-day notice, questions about whether the plaintiff owns the loan, and timing issues under the statute of limitations, which the Foreclosure Abuse Prevention Act of 2022 made harder for lenders to reset.
5. The settlement conference notice. If you live in the home and it is a one-to-four family house or condo, the court schedules a mandatory conference under CPLR 3408, generally within 60 days after the lender files proof of service. More on that below.
6. Motions for judgment and the referee. If the case does not settle, the lender asks the court to appoint a referee to compute what is owed and then moves for a Judgment of Foreclosure and Sale. You or your lawyer can oppose these motions.
7. Notice of sale. After judgment, the referee schedules the auction and the notice is published in a local paper. This is the last stage at which you can pay off the loan, reinstate if the lender agrees, or close a sale.
8. The auction and the referee's deed. The house goes to the highest bidder, often the lender itself. Your ownership ends there. Any surplus above the judgment is deposited with the court, and a deficiency claim by the lender has to be made by motion within 90 days after the referee's deed is delivered (RPAPL §1371).

How long all of this takes depends on your county's court calendar, how many conferences are held and whether the case is contested. It is commonly measured in years rather than months, but some uncontested cases move faster than owners expect.

The Settlement Conference and the Equity of Redemption

The conference. CPLR 3408 is New York's most important protection for owner-occupants. Both sides must negotiate in good faith, meaning the lender's representative has to show up with authority to settle, cannot push the case forward while a complete modification application is pending, and has to give accurate information. A lender that fails can lose interest and fees and face other sanctions. A homeowner who stops participating can be removed from the conference calendar, which lets the case resume.

Things that help at a conference:

1. File your answer on time anyway. The conference does not stop the clock on the answer.
2. Bring proof of income, recent bank statements, tax returns, a written hardship statement and your latest mortgage statement.
3. Bring a housing counselor or lawyer if you can. HOPP can arrange one at no charge.
4. Know your fallback. If a modification is unlikely, tell the court if you intend to sell. Judges and lenders will often allow time for a real closing.

For a lawyer referral, the New York State Bar Association's service is (800) 342-3661.

The equity of redemption. New York has no waiting period after a foreclosure sale during which you can buy the house back. Instead, from the day you default until the auction is held, you have the right to pay the debt in full and keep the property. In practice, that right is what lets you sell: a buyer's money pays the lender, the lender's lawyer discontinues the case, and you keep the difference. Once the auction is held, it is gone.

Choices That Fit Each Stage

Before the lawsuit is filed

• Catch up the arrears, or apply for a modification, repayment plan or forbearance
• Get a free counselor through HOPP or a HUD-approved agency ((800) 569-4287)
• List with an agent if you have equity and time for a financed buyer
• Sell for cash if you want a fixed closing date

After you are served, before judgment

• The CPLR 3408 conference, with documents in hand
• A short sale if the house is worth less than the debt, with the lender's written approval
• A sale at market value if you have equity
• Chapter 13 bankruptcy, which stops the case with an automatic stay and spreads arrears over a plan

After judgment, before the auction

• Pay off the judgment amount or, if the lender agrees, reinstate
• A sale that can close before the auction date
• A deed in lieu, if the lender agrees to take the house back without an auction

After It Ends: Credit and Moving On

Every payment you miss is reported to the credit bureaus, so some damage is done by the time any foreclosure is filed. What you can still influence is how the story ends:

• A completed foreclosure stays on your credit report for seven years.
• Fannie Mae's guidelines generally require a seven-year wait after a foreclosure for a new conventional mortgage, compared with four years after a short sale. FHA and VA have their own, shorter waiting periods.
• A sale that pays the mortgage in full is not a negative event on its own, so the recovery starts from the late payments rather than from a foreclosure.
• Equity you keep from a sale can become the deposit on your next home or rental.

Selling Before the Auction

When a homeowner calls us mid-case, the first questions are practical: what is the index number, is there a conference date, has a judgment been entered, and is a sale date published? From there we can look up the docket, request a payoff through your attorney or the lender's, and tell you whether a closing can happen in time. Cash closings in New York still need a title search and both sides' attorneys, but without a mortgage commitment or appraisal they can usually be scheduled within a couple of weeks of signing.

At the closing, the lender is paid the full payoff figure, which includes its legal fees and advances. The lender's attorney then discontinues the action and cancels the notice of pendency. You receive whatever is left after that payoff and any other liens. Call (914) 610-7499 with your index number and we will tell you plainly whether selling makes sense for you.