The foreclosure process in New York State.

• Lender initiates foreclosure: The lender files a lawsuit against the homeowner in court, known as lis pendens, alleging default on the mortgage payments. This typically occurs between three and twelve months after the last payment.

• Service of legal documents: The homeowner, any occupants, judgment creditors with a common name, and secondary mortgage holders are served with a summons and complaint, informing them of the foreclosure lawsuit. The lis pendens is attached to the summons and complaint.

• Homeowner response: The homeowner or any interested parties have a limited time to respond to the lawsuit, typically around 21 days.

• Mediation opportunity: The bank and the homeowner, through the courts and a petition letter, may attempt to mediate in order to work out a payment arrangement for the mortgage.

• Appointment of referee: The bank submits paperwork to request the appointment of a referee to compute the amounts owed and eventually oversee the foreclosure sale.

• Calculation of costs: The bank must submit all costs to date so the referee can compute the amount owed to the bank, to be included in the final default judgment.

• Default judgment: If the homeowner fails to respond, the lender can seek a default judgment from the court. If the homeowner submits an answer, it will delay the process.

• Judgment of foreclosure and sale: The court issues a judgment allowing the property to be auctioned off to satisfy the debt.

• Setting of foreclosure date: The referee sets a foreclosure sale date, which often gets adjourned.

• Public auction: The property is auctioned off to the highest bidder at a public sale, typically held at the local Town Hall.

• Bank repossession or sale: If the bank is owed more than the property's value, they may take back the property unless it is sold at a discount. Occasionally, an investor will purchase the property.

• Investor purchase and notice to vacate: After an investor makes a down payment and enters into a contract with the referee at the auction, they typically close within 30 to 90 days. The investor must serve a 90-day notice to the occupant to vacate the premises after closing on the property.

• Bank repossession and "cash for keys": If the bank repossesses the property, they may send a realtor to negotiate a "cash for keys" deal, which may take anywhere from one month to two years before the realtor arrives. Sometimes, the eviction process begins immediately.

• Eviction process: If the homeowner does not vacate voluntarily, the new owner will initiate the eviction process after the 90-day notice has expired. Legal assistance from pro bono services may be available for eviction defense.

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