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What is the timeline in a foreclosure?

Although many New York residents were able to make it through the economic turmoil of the last decade in fair financial shape, the reality is that there are still many people who are struggling. All indications are that the national economy and housing markets are on the upswing, but that doesn't mean that everyone gets to share in the benefits. Some New York residents may still face the possibility of a foreclosure on their home.

What is the timeline in a foreclosure in New York? Well, the first indication of problems is a missed mortgage payment. Even one missed payment can send up red flags for the lender, even if a borrower has made timely payments for years. After all, if there is one monthly bill that families in New York prioritize over all others, it is probably the mortgage payment. Missing that payment could be a sign of serious financial challenges.

Next, the lender will likely assess a late charge for the missed mortgage payment, as well as sending out a notice regarding the missed payment. After that, in the first or second month after a missed payment, the lender may send out a "pre-foreclosure notice." This notice will make official what the homeowner probably already knows: this is a serious financial matter that needs to be addressed immediately.

At some point, the delinquent homeowner will also likely receive a letter from the lender that shows exactly how the borrower has violated the mortgage agreement. This will indicate how much must be paid to pay off the amount that is owed, in addition to late charges.

If the troubles continue after that, a foreclosure action will become more likely as time goes on. On average, a foreclosure in New York takes over a year to complete from the time the issue becomes known to the lender. New York residents who are having trouble making their mortgage payments should explore their legal options well before that time.

Source: Department of Financial Services, "ACT QUICKLY: What May Happen When You Fall Behind," Accessed March 20, 2017

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