A mortgage lender (bank) will typically refer a mortgage loan account to foreclosure when the borrower (homeowner) is in default, such as when the homeowner fails to pay the mortgage payment(s), property taxes, hazard insurance, etc. If the house is occupied by the homeowner, the bank is required to serve the homeowner with a 90 day pre-foreclosure notice (aka the "RPAPL Section 1304 notice") advising the homeowner that s/he must pay all arrears to the bank and that the homeowner can contact the bank to find out if the homeowner qualifies for any mortgage assistance (modification, forbearance, repayment, etc.). The notice permits a 90 day breathing period for the homeowner to try and resolve the default before the bank commences foreclosure. If the default is not resolved within the 90 day period, the bank will likely send another notice (notice of default) indicating that if the default is not cured within thirty days, the bank will accelerate the loan balance and the entire loan amount will become due. If the default is not cured after the thirty days, the bank can commence foreclosure proceedings anytime thereafter. Formal foreclosure proceedings begin when the bank records a notice of pendency in the land records and files a summons and complaint seeking the right to foreclose against the homeowner's house. There are numerous legal requirements that the bank must comply with when it serves the summons and complaint on the homeowner. Typically, the homeowner has 20 or 30 days to file an answer contesting the bank's foreclosure action. Usually sixty days after the foreclosure action is commenced, the court will order the parties to appear for a mandatory foreclosure settlement conference which is intended to see if the homeowner is eligible for mortgage assistance. If the borrower is denied mortgage assistance and does not have the ability to pay the arrears, the litigation will proceed. The below link offers additional information pertaining to the typical motions that the bank will file with the court. If the motions are not contested by the homeowner, the bank will be granted the right to foreclose and sell the house at public auction.
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Arnold M. Bottalico is an experienced Long Island, NY foreclosure attorney with over 25 years of experience, and he welcomes your questions and comments.