Foreclosure Law in New York
Foreclosure in Rochester, New York is a process that allows a lender to take possession of the property that was used to secure their loan, in the event that the borrower fails to repay it.
When individuals are facing foreclosure, it usually involves a house. The bank will take the house with the intent of selling it at an auction, hoping to cover whatever's left on the mortgage, giving them at least a chance to break even on the loan.
In every U.S. state, including New York, a borrower has a right to a judicial sale of their foreclosed property. A judicial sale is simply an auction overseen by a court. The purpose of this is to make sure that the lender takes reasonable steps to sell the home for the highest possible price, and to ensure that the homeowner has an opportunity to bid on the house, if he or she is able. It is in everybody's interest for the bank to get the highest price possible for the house, even the borrower's. If the house fetches a higher price than what's left on the mortgage, the buyer can keep what's leftover. On the other hand, if it fetches less, the buyer might have to pay the deficiency.
In many states, mortgages fall into a category of loans known as "non-recourse loans." This means that, if the house is sold by the lender, the entire debt is eliminated, even if the sale price was less than the remaining balance on the loan. While the loss of one's home can be personally devastating, treating a mortgage as a non-recourse loan at least means that the homeowner will be more or less free to move on with their life once the property is foreclosed and sold.
How to Possibly Avoid Foreclosure in Rochester, New York
It's very important that you engage in continued communication with your bank. Lenders are surprisingly willing to make accommodations if it means they still get paid something, but in order to accommodate your situation, they have to know about it.
You must keep in mind that banks are in the business of lending money, not flipping property: the bank doesn't really want your house. To that end, they'll sometimes go to great lengths to accommodate your financial situation, whatever it may be. For banks, foreclosure is a last resort.
It's possible that your lender is willing to negotiate a plan that results in temporarily-lower payments on your mortgage, especially if this means that they will be able to get some payments, instead of none at all.
As a last resort, some borrowers consider a "short sale." In a short sale, the homeowner sells the house to the highest bidder, and uses the proceeds to pay off the remaining debt. If there is any extra from the sale, it goes to the borrower. If the sale price is worth less than what's left of the mortgage in New York, the remaining debt is discharged.
Can a Rochester, New York real estate attorney help?
If you live in Rochester, New York and believe that your house is in danger of being foreclosed, you may have more options and protections than you think. You may not know what all of them are, but an experienced real estate lawyer probably will.