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What is a 'judicial foreclosure' in New York?

It is an unfortunate fact that, for many reasons, foreclosure rates in the United States have accelerated in recent years. For Long Islanders that have fallen behind on their mortgages, this means the stress of potential foreclosure proceedings, with a possible result of losing their homes. Nevertheless, what is the process by which a lender can bring a home into foreclosure in New York?

There are two basic forms of foreclosure in the state: judicial and non-judicial. Today, we will look at the more commonly used judicial foreclosure. As the name may imply, this process uses the court system to move the foreclosure forward. This means that, as with any civil lawsuit, the lender must file a complaint against the borrower in the courts.

In this proceeding, the lender will produce evidence that that the mortgage borrower did, in fact, borrow the funds in question, with the home being used as security to back the loan. This will usually be in the form of the mortgage documents or promissory note. Then, the lender will have to show that the borrower is delinquent in his or her payments.

If the court finds the borrower to be in default, it will usually give the borrower some set amount of time to bring the loan current. At that point, if the borrower remains in default, the court will order the property to be sold to satisfy the loan amount. This is generally done at a public auction held by the county with jurisdiction or a designated referee.

Once, the property is sold, the lender receives a portion of the proceeds sufficient to satisfy the debt. The sale is registered with the court, along with a receipt showing payment to the lender. Long Island residents who are behind on their mortgages should realize there may be ways to avoid foreclosure, but they need to be proactive. People in this situation may wish to consider consulting an experienced New York attorney.

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