How foreclosure works in New York: a court process

What are the steps in a New York foreclosure?

Texts below were read on the New York State Senate website on October 13, 2026.

1. 90-day notice. Before starting a case on a “home loan,” the lender, assignee or servicer must mail the borrower a notice by registered or certified mail and by first-class mail, to the last known address and to the property. It warns “YOU MAY BE AT RISK OF FORECLOSURE,” states the amount in default, lists at least five housing counseling agencies for the county and gives the numbers of the state Attorney General’s hotline and the Department of Financial Services helpline. The notice is a condition precedent to starting the case. The 90 days do not apply if the borrower files federal bankruptcy or no longer lives in the home as a principal residence.
2. Summons, complaint and homeowner notice. With the summons and complaint, the homeowner of an owner-occupied one-to-four family home must receive a page titled “Help for Homeowners in Foreclosure” (RPAPL § 1303). It says the owner is not required to leave until a foreclosure sale and warns about rescue scams.
3. Answer. An answer is due within 20 days after service of the complaint (CPLR § 3012(a)). When service is made by certain other methods, such as delivery to a state official, the time is 30 days after service is complete (§ 3012(c)).
4. Settlement conference. In a residential case on a home loan where the owner lives in the home, the court holds a mandatory conference within 60 days after proof of service is filed (CPLR § 3408). Both sides must attend with authority to settle and bargain in good faith. They discuss options such as a loan modification, short sale or deed in lieu of foreclosure. A defendant who appears at the conference without a timely answer is presumed to have a reasonable excuse and may answer within 30 days.
5. Judgment and sale. The judgment directs a sale “by or under the direction of the sheriff of the county, or a referee” (RPAPL § 1351). The sale is a public auction to the highest bidder.
6. Deed and deficiency. After the sale, the lender may seek the unpaid balance within 90 days of delivering the deed (RPAPL § 1371).

Key deadlines

How long does the lender have to sue?

CPLR § 213(4) sets a six-year limit on an action on a note secured by a mortgage. A 2022 law, Senate bill S.5473-D, tightened how that clock works. According to the sponsor’s memo, it:

• stops a party from “de-accruing” a claim, or extending the limit, unless a law expressly allows it;
• limits the six-month refiling extension after certain dismissals;
• bars some late motions to extend time to serve a defendant.

Two rules are in the CPLR today. Under § 3217(e), a voluntary discontinuance does not “waive, postpone, cancel, toll, extend, revive or reset” the limit. Under § 213(4)(a), a defendant who raises the time limit and argues the debt was accelerated earlier can hold the lender to that acceleration, except where an earlier case was dismissed on an express finding that the debt was not validly accelerated.

Whether the limit has run on a specific loan depends on its history. That is a question for a lawyer.

How does the sale work?

Only as much property as needed to cover the debt, expenses and costs may be sold (RPAPL § 1351). For one-to-four family homes, the judgment names the servicer and its telephone number. Notice of sale is published in a newspaper, either once a week for four successive weeks or at least twice a week for three successive weeks (RPAPL § 231). Within one year after the sale, a court may set it aside for a defect in notice, timing or manner, but only if a party’s substantial right was prejudiced.

Can the lender collect the balance?

Sometimes. If the sale price falls short of the debt, the lender can move for a deficiency judgment within 90 days after the deed is delivered (RPAPL § 1371). The court sets the property’s fair market value as of the sale date. The deficiency equals the debt, interest and costs minus the higher of that value or the sale price. If the lender misses the 90 days, the sale proceeds count as full payment, and no deficiency can be collected later.

Example (illustrative numbers only). The debt, interest and costs total $500,000. The home sells for $380,000, but the court finds a fair market value of $420,000. The deficiency is $500,000 minus $420,000, or $80,000, not $120,000.

What happens to tenants?

Owner-occupants get the homeowner notice. Tenants get their own notice within 10 days after the summons and complaint are served (RPAPL § 1303). After a sale, a tenant not under rent control or stabilization can stay for the greater of 90 days from the new owner’s notice or the rest of the lease, in the situations RPAPL § 1305 describes. Tenants can read more on tenant rights in New York.

What if you are buying a foreclosed home?

Sales by sheriff, referee or a lender that took the property through foreclosure are exempt from the state disclosure statement (Real Property Law § 463). That means the seller may give you no condition statement. Plan for your own inspection and a title review. See seller disclosure in New York, home inspection cost and title insurance explained.