Foreclosure Law in New York
Foreclosure in Spring Valley, 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.
If an ordinary consumer faces foreclosure, it usually involves a home that was purchased with a mortgage from a bank. The bank will usually try to sell the house at a public option, with the hope of at least covering the remaining debt, to avoid taking a large loss.
In every state, including New York, homeowners have the option to go through what is known as a foreclosure by judicial sale. Essentially, this means a court will oversee the sale of the house to ensure that the bank makes reasonable efforts to sell it for as high a price as possible (to help avoid a deficiency that the borrower may have to pay), and to ensure that any money which might be left over from the sale (after the balance on the mortgage is paid) goes to the borrower.
In some states, original mortgages are known as "non-recourse" loans, making the above problem a non-issue. This essentially means that once the mortgaged property is sold by the lender, the debt is discharged, even if the sale nets less than the remaining balance on the mortgage. The borrower will simply have to write this off as a loss. However, this usually does not apply to refinanced or second mortgages.
How to Possibly Avoid Foreclosure in Spring Valley, 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 case, they have to know about it.
Throughout all this, you should remember one thing: the bank doesn't really want your house. After all, banks aren't real estate speculators, they're mainly money lenders. They stand to make a great deal of money if you are able to make your mortgage payments until it's paid off. They're likely to make much less if they're forced to sell your house.
If you experience a sudden change in your financial situation, your lender, in an effort to keep you from defaulting, might be willing to accept lower monthly payments, at least temporarily.
As a last resort, you might consider a "short sale," which results in loss of the home, but it usually leads to a great deal of the debt on the mortgage being forgiven. Essentially, a short sale in New York involves selling the house for whatever price it can fetch. The proceeds from the sale go to the lender, and if it sells for less than what's left on the mortgage, the balance of the debt is forgiven.
Can a Spring Valley, New York real estate attorney help?
If you feel that your home is close to being foreclosed in Spring Valley, New York, and want to try to prevent this, the advice and assistance of an experienced real estate lawyer can mean the difference between keeping or losing your home.