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The legal steps involved in a foreclosure

When New York residents face challenges like job loss, persistent unemployment or a medical crisis, the financial repercussions can affect many parts of their lives. Foreclosure is one example of these consequences and can be devastating for many people. The loss of a home is much more than the loss of a financial investment.

In order to avoid foreclosure, it can be important to understand how the process works.

Under New York law, after a homeowner misses a mortgage payment for the home he or she lives in, the lender must send a pre-foreclosure notice 90 days before initiating foreclosure proceedings. New York law spells out some of what must appear in the letter, including the amount owed and contact information for agencies that can help those who are struggling to make payments.

After this, the lender sends a notice that the borrower is in breach of the lending agreement. The borrower will have 30 days to pay the delinquent amount and any late fees.

Once the 90-day pre-foreclosure period is over, the lender can begin the legal process of foreclosure. This is a type of lawsuit, and it can take as much as nine months to complete. It will officially begin when the lender files a complaint with the court and the borrower receives a summons. After this, the court must schedule a conference within 60 days in an effort to settle the dispute.

It's important for borrowers to have legal representation at all times during the process, but especially during the settlement conference. The lender, usually a bank or mortgage company, will have sophisticated professional representation looking out for the lender's interests, and they can easily lead a borrower into a bad deal if the borrower is not prepared. New York attorneys with experience in these matters can help struggling homeowners to avoid potential pitfalls and find a solution. In many cases, they can help the borrower to stay in the home.

Source: New York State Department of Financial Services, "Act Quickly: What May Happen When You Fall Behind," accessed April 10, 2015

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