This resource will help you understand what to expect if you cannot pay your mortgage and help you prepare to defend yourself in court if you find yourself in foreclosure proceedings.

The Basics


What is foreclosure?

Foreclosure is the process by which a bank, or mortgage lender, attempts to recover the balance of a home loan from a borrower who has stopped making payments.

In New York, foreclosures happen in court

New York is a “judicial foreclosure” state, which means that foreclosures go through the courts. This means that borrowers automatically have the right to contest the foreclosure and it also means the foreclosure takes longer.

If you are in foreclosure, you are not alone

1 in 21 homes in New York state are in foreclosure and another 1 in 10 are at risk.

How long does foreclosure take?

According to the New York State Comptroller, the average foreclosure case takes about 2.5 years in New York State. 

In reality, however, the time a foreclosure case takes depends on where you live. In upstate New York, foreclosure cases take about 1.5 years, while cases down state tend to take longer—about 3.5 years.

Who is involved in foreclosure?


Here are the people involved in a foreclosure


You may be referred to as the homeowner, borrower or defendant.

The bank's attorney

An attorney who represents the bank. Sometimes the bank may have more than one attorney representing it. 

You will have to speak to the bank’s attorney during settlement conferences.

This attorney works for the bank, and it is his or her job to protect and represent the bank’s interests. Also, he or she may not be a trusted source for information about your case.

The process server

The process server’s job is to serve you with (give you) the legal papers that will start the foreclosure process against you. These papers are known as the Summons and Complaint. 

The process server will attempt to find you several times. If the process server cannot locate you, he or she will tape the documents to your front door.

The Judge

The judge is the person who will decide your case and approve or deny various steps along the way. 

The judge’s job is to be impartial and make fair decisions. 

If you do not understand what is happening in court, you can ask the judge to explain what is going on.

The court attorney

A court attorney is a lawyer who assists the judge by researching legal questions and helping to write decisions. 

The court attorney may also mediate settlement conferences, with the hope that you and your bank can reach an agreement to keep you in your home.

If you have questions about things being discussed in the settlement conferences, or the terms of an agreement, you can ask the court attorney to explain things to you.

The court clerk

The court clerk is the person who is responsible for maintaining the records (papers, files) of the court. You may have to go to the clerk to file paperwork.

The referee

A referee is appointed by a judge to compute the total amount you owe the bank. 

Referees are typically attorneys, but they do not take any side in the case. They are required to be impartial. 

The referee also, if necessary, conducts the sale of your home at auction and then distributes the money.

You will probably not interact with the referee.

Here are the places involved in a foreclosure

Your home

This is the property for which you took out a mortgage. 

The bank

The bank is the entity that owns your mortgage. The bank may also be referred to as the lien holder, lender or plaintiff. 

Keep in mind, this may not be the same entity that you originally borrowed from when you purchased your home. Banks often sell home loans to other banks at some point after closing.

Mortgage servicer

The mortgage servicer is where you send your mortgage payments. Your servicer may or may not be the same bank or company that gave you your home loan.

The court

The court is the official body that oversees legal disputes. In New York, foreclosure cases happen in the New York Supreme Court. 

*Despite its name, the Supreme Court is actually the lowest court in New York State.

County recorder

The county recorder's job is to maintain permanent public records related to transactions involving real estate, mining, personal property, mortgages, liens, leases, subdivision plats, military discharges, and personal bonds. 

The recorder also maintains and preserves all legal documents affecting title to real property. These records are the legal basis for determining ownership. You may have to file paperwork with the county recorder.

The county recorder is also known as the county clerk.

What are the stages of foreclosure?


1. Missed payments

2. Pre-foreclosure notice

3. Demand letter

4. Summons and Complaint

5. You respond

6. Settlement conferences

7. After settlement conferences

8. Auction

1. Missed payments

When you fall 30-60 days behind on your mortgage, you are at risk of foreclosure.

People fall behind on their mortgages for many reasons, for example, loss of employment, divorce or unexpected medical costs.

If you are in this tough situation, call your bank as soon as possible to talk about ways to get back on track with your mortgage. The earlier you reach out to your bank, the more options that will be available.

2. Pre-foreclosure notice

When you are about 30-60 days behind on your mortgage, the bank will send you a 90-day pre-foreclosure notice.

What is a 90-day pre-foreclosure notice?

It is a document that tells you the bank will open a foreclosure case against you in 90 days. The bank is required by state law to send you this notice.

What information will be included?

The bank is required to tell you how much you must pay to bring your loan current. It must also provide the names and telephone numbers of at least five housing counseling agencies that serve your county.

Why 90 days?

It is a grace period to allow you to work out an alternative solution with your bank.

3. Demand letter

When you are 45-60 days late on your payments, the bank will send you a Notice of Default and Intent to Accelerate letter. It is also called a Demand Letter.

What is a demand letter?

This is an official notice that you are in default, and that unless you bring your account current, the bank will begin a foreclosure action in court. You have once more chance to resolve your late mortgage problem before the court gets involved.

I’m in the middle of working out a solution with my bank but I still got a demand letter. Why?

Often the department that helps find a solution is separate from the department that sends default notices. If you received a default notice but you have been working with your bank, give them a call.

4. Summons and Complaint

If you have not resolved the issue, you will receive a summons and a complaint.

What are a Summons and a Complaint?

They are the first two documents, along with a lis pendens (Latin for “case pending”), that a bank files to open a foreclosure case in court. (You do not see a copy of the lis pendens.)

  • The summons informs you that a case has been started against you. 
  • The complaint explains why the bank believes they are allowed to take you to court. 
  • The lis pendens alerts anyone interested in your property that there is an open lawsuit related to your property.

The next page explains how to read a Summons.

5. You respond

Once you receive a Summons with a Complaint, you need to reply to the Complaint. If you were served in person, you have 20 calendar days to respond. If you were not served in person, you have 30 calendar days to respond.

You can respond by filing one of two documents:

1. An Answer

An Answer is your chance to tell the court your side of the story. In an Answer you explain your defenses, which means you tell the court why you have not been able to pay your mortgage. You may also raise any legal claims that you have against the bank.


2. A Notice of Appearance

Unlike an Answer, you do not tell your side of the story. You simply tell the court you want to participate in the case and that you want to receive copies of all the documents.

Need to file an answer?

This resource shows you how to do it yourself. 

6. Settlement conferences

What is a settlement conference?

A settlement conference is a meeting scheduled by the court (you will get a letter), for you and your bank to talk about your case and see if it can be resolved. For example, you may see if the terms of the loan can be changed so that you can afford to pay every month. The court mediates the conference.

If you are able to reach an agreement with your bank during the settlement conference phase, your foreclosure case will be closed. If you are unable to reach an agreement, your case will move forward.

Where do settlement conferences take place?

Settlement conferences are held in the courthouse, but not necessarily in a courtroom. It may be in a regular conference room in the building.

What is talked about at a settlement conference?

Usually you will describe your financial situation, including your income and debts, and any savings. The bank should be able to describe, to you and the court, how much you owe and how the amount was calculated.

What happens after the settlement conference?

The bank will likely give you forms to fill out so that it can review your loan for a possible modification. The forms will ask about your income and expenses, copies of your most recent bank statements and income taxes. 

Will I have to go to multiple settlement conferences?

It is hard to say, as every case is different. But it’s safe to plan on attending more than one.

You should go to your first settlement conference

Going will help you reach a solution that works for you. If you don’t go, the court may let the bank to continue with the foreclosure without working with you.

Also, going will give you more time to file an Answer (if you haven’t already). If you go, you have 30 days from the date of the settlement conference to file an Answer.

7. After settlement conferences

If you were unable to reach a resolution with the bank in settlement conferences, your case will move forward. Here is what typically happens:

The bank will ask the court for an Order of Reference, which appoints a referee to compute the amount you owe the bank.

The bank will also file either a Summary Judgment Motion (if you filed an Answer) or a Default Motion (if you did not file an Answer). Both motions allow the foreclosure to go forward against you. 

Once the referee is done computing the amount you owe, the bank will ask the court for a Judgment of Foreclosure and Sale, which is a legal document that allows them to sell the property.

8. Auction

If the judge approves the bank’s Motion for Judgment of Foreclosure and Sale, the bank will schedule a date for the home to be sold at an auction.

Will I be notified of the auction date?

You will get written notice and a notice will be posted on the door of the home. An announcement will also be made in a local newspaper.

When will the auction happen?

It depends how fast the bank can get it scheduled. It must provide public notice of the auction at least 30 days before the date of the auction. 

What happens at an auction?

The bank will set a minimum bid, and the home is sold to the highest bidder. If there are no bids that meet this minimum, ownership of the property will go to the bank.

What happens if the home is sold for less than the amount I owe the bank?

Your bank has the legal right to file a Deficiency Judgment, which would mean that you are still responsible for the remaining balance. 

The bank must file for the Deficiency Judgment within 90 days. 

If the bank does not file in this time period, they lose the right to collect the remaining balance from you. 



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Last Reviewed: November 1, 2017