Stop Foreclosure & Sell Your Hudson Valley Home Fast for Cash

Behind on the Mortgage in Westchester, Rockland or Putnam

If you are reading this, there is a good chance a letter from your servicer is sitting on the kitchen table, or you have already been handed court papers. Take a breath. New York is one of the slower states for foreclosure, because a lender cannot take a house here without a lawsuit and a judge's signature. That gives homeowners time. The problem is that the time gets used up quietly, one adjournment at a time, and many people only start looking at options once a sale date has been set.

This page explains the New York process step by step, where your real decision points are, and how selling the house fits in when keeping it is not realistic. It is not legal advice. A free housing counselor or foreclosure attorney, both described below, should be your first call.

The 90-Day Notice Is Your First Real Warning

Before a lender can sue on a home loan in New York, it has to send you a specific notice at least 90 days ahead of filing. RPAPL §1304 requires that notice to go by certified or registered mail and also by first-class mail, and to list at least five housing counseling agencies that serve your region. The lender also has to report the notice to the New York State Department of Financial Services under RPAPL §1306.

Courts in New York take these requirements seriously. A lender that cannot prove it mailed a proper 1304 notice can have its case dismissed. That does not make the debt go away, but it is one reason to have a lawyer or counselor look at your paperwork rather than assuming the lender did everything right.

Practically, the 90-day window is the best moment to act. No lawsuit exists yet, nothing has been filed in the county clerk's office, and your servicer is still required by federal rules to review any complete loss-mitigation application you send.

When You Are Served: The Answer Deadline

The lawsuit starts with a summons and complaint, delivered with a separate notice titled "Help for Homeowners in Foreclosure" (RPAPL §1303). Your deadline to respond depends on how you were served: generally 20 days if the papers were handed to you personally, and 30 days if they were served another way, such as left with someone at the house and mailed.

Do not let that deadline pass. Filing an answer preserves defenses, including problems with the 90-day notice, whether the plaintiff actually holds the loan, and statute of limitations issues that New York tightened with the Foreclosure Abuse Prevention Act of 2022. The settlement conference does not pause your time to answer.

The CPLR 3408 Settlement Conference

If the loan is a home loan and you live in the house, the court must schedule a settlement conference, generally within 60 days after the lender files proof that you were served. You will be in a courtroom or conference room in your county's Supreme Court with a court attorney or referee, the lender's lawyer, and you or your representative.

• Bring paperwork: recent pay stubs or benefit letters, tax returns, bank statements, a hardship letter and your mortgage statements. The court can direct what you need.
• Both sides must negotiate in good faith. A lender that stalls or shows up without authority to settle can face consequences, including having interest and fees cut off.
• Possible outcomes: a loan modification, a repayment plan, a forbearance, or an agreed exit such as a short sale or deed in lieu. Some conferences end with the homeowner deciding to sell and the lender agreeing to give time for a closing.

Conferences can continue over several months. Use that time. If a modification is not coming, a sale while the case is still in the conference part keeps far more of your options open than a sale attempted a few weeks before an auction.

Free Help Worth Calling Today

• New York State Homeowner Protection Program (HOPP): run by the Attorney General's office through a statewide network of nonprofit counselors and legal services groups. The hotline is 1-855-466-3456 (855-HOME-456), and homeownerhelpny.org has the details.
• HUD-approved housing counselors: (800) 569-4287 or hud.gov/counseling. Counselors help put together a modification application and can attend conferences with you.
• Legal Services of the Hudson Valley: lshv.org, free legal help for eligible homeowners in Westchester, Rockland and Putnam.

For a longer walk through every stage, with what to bring and what to ask, read our guide to the New York foreclosure process.

One program you may see mentioned online is no longer available: the New York State Homeowner Assistance Fund, the pandemic-era grant program, has closed and is not taking applications. Be wary of anyone who promises to get you money from it.

Your Options, Roughly in Order of How Early They Work

Reinstate or modify

If the hardship was temporary and your income has recovered, paying the arrears (reinstatement) or getting a modification keeps the house. Modifications take time and complete paperwork, which is why starting during the 90-day window matters so much.

List with an agent

If you have solid equity and months of runway, a traditional listing can bring the highest price. The catch in foreclosure is time: a financed buyer needs an appraisal, an inspection and a mortgage commitment, and any one of those can slip. If your case is close to judgment, build in a backup plan.

Short sale

If you owe more than the house is worth, the lender may agree to accept less than the full payoff. Short sales need the lender's written approval, which can take a while, and you should ask in writing whether the lender will waive any remaining balance.

Sell to a cash buyer

A cash sale has no appraisal, financing or repair contingencies, so the closing date is in your control. We can usually close in a couple of weeks once title work is back. At closing, the title company pays the lender's full payoff (including foreclosure fees and costs), the lender's attorney discontinues the case, and whatever equity is left goes to you.

Chapter 13 bankruptcy

Filing triggers an automatic stay that stops a scheduled auction, and a Chapter 13 plan can spread mortgage arrears over three to five years if your income supports it. It is a serious step; talk to a New York bankruptcy attorney first.

What Happens at the Referee's Sale

If the case reaches judgment, the court appoints a referee to compute what is owed and conduct the sale. Notice of the auction is published in a local newspaper and the sale is usually held at or near the county courthouse. A few things homeowners should know:

• The lender usually bids. It can bid up to the judgment amount without bringing cash, so many houses go back to the lender.
• No redemption after the sale. In New York your right to pay off the loan and keep the house (the equity of redemption) ends when the auction is held.
• Surplus money. If the house sells for more than the judgment, the excess is deposited with the court and must be claimed through a surplus money proceeding. Claims from other lienholders come out first.
• Deficiency. If the sale brings less than the debt, the lender can ask for a deficiency judgment under RPAPL §1371, but only by motion within 90 days after the referee's deed is delivered, and the court credits the home's fair market value, not just the auction price.
• Moving out. After the sale the new owner must still go through a legal process to remove occupants. Tenants in foreclosed homes have their own protections.

A sale before the auction avoids every item on that list. The loan is paid in full, nothing is left to claim or defend, and you choose your moving date.

Credit and Future Borrowing

Missed payments are reported whether or not the house is eventually sold, so a sale does not erase what has already happened. What it changes is the event that follows. A completed foreclosure is a severe mark on a credit report for seven years. Fannie Mae's guidelines generally require a seven-year wait after a foreclosure before a new conventional loan, compared with four years after a short sale. A regular sale where the mortgage is paid in full is not a derogatory event in itself. If you want to buy again, ask a loan officer how each path affects your timeline before you decide.

A Note on Timing

Every stage of a New York foreclosure gives you a natural pause: the 90 days before filing, the answer period, the conference months, the time between judgment and the sale. Homeowners who use one of those pauses to make a decision almost always come out better than those who wait for the next letter. If you are not sure where your case is, the county clerk's online records or your attorney can tell you, and so can we if you send us the index number.