Right before New Year’s Eve, Governor Cuomo signed the COVID-19 Emergency Eviction and Foreclosure Prevention Act. This Act prevents COVID-related foreclosures and evictions from negatively affecting your credit. It also extended the foreclosure and eviction moratoriums to May 1, 2021.
These moratoriums do not suffice as protection for those facing foreclosure. New York topped the nation for mortgage delinquency rates at 1.90%. If you are one of these New Yorkers wondering if you can reverse a foreclosure sale, fill out a free consultation form and continue reading below to receive some information about your right of redemption after foreclosure.
What is a Foreclosure Sale?
When New Yorkers default on their mortgages, lenders are required to wait until 120 days of delinquency have passed. After 120 days have passed, a 90-day pre-foreclosure notice of default must be sent. Once these days are completed, the lender can officially begin the foreclosure process. With a filed lawsuit, the lender requests the court for repossession to mitigate the losses from the delinquency.
Approval of the repossession leads to approval of the auction. The person that places the highest bid is deemed the purchaser of the home. Auctioning a foreclosed house can take years. The eviction process begins once a purchaser is chosen.
Can a Foreclosure Sale Be Reversed?
There are a few methods to reverse a foreclosure sale, but they are determined by the state law where the foreclosed property resides. New York does not allow a foreclosure redemption period. Instead, New Yorkers retain a foreclosure right of redemption. Additionally, New Yorkers can set aside the sale by challenging the legality of the foreclosure.
Right of Redemption
Before the sale, New Yorkers can pay the delinquent amounts on their defaulted mortgages and redeem their homes any time before the home is sold at a foreclosure auction.
Setting Aside a Foreclosure Sale
A foreclosure sale can be set aside by the court. File an Order to Show Cause with the court. You should file this to set aside the foreclosure sale. If you believe that you have good cause to set aside the foreclosure, reach out to The Law Office of Yuriy Moshes, P.C. for a free consultation.
Foreclosure Redemption Period
In some states, a foreclosure can be reversed during the foreclosure redemption period, allowing a period of time, after the auctioning has ceased, to pay the debt on the home. This will set aside the foreclosure sale, and the lender will transfer the home back into your possession. The lender will be required to honor the foreclosure redemption period by state law, but each state has different rules concerning the redemption period.
Unfortunately, New York does not allow a foreclosure redemption period, nor can New Yorkers buy their homes back at the auction.
The Statutory Redemption Time
If you live in a state that allows redemption periods, the statutory redemption time will be determined under that state’s laws. Some states will allow people to redeem their homes up to 180 days after the sale. There is no foreclosure redemption period in New York. Instead, you can pay the delinquent amount any time before the sale finalizes.
During the redemption period, you can either:
- Pay off your debt directly to the lender or to the court, or
- Pay the purchaser the amount they paid for the home.
Both methods can get your house back after the foreclosure sale. New Yorkers do not have this second option, and the first option must be completed any time before the sale date.
Cost to Redeem
Redemption requires payment of:
- The principal,
- The interest, and
- Other affiliated costs.
- Could possibly include court fees
How to Set Aside Foreclosure Sale
With good cause, New Yorkers can set aside foreclosure sales on their home. If you are interested in using this method, you should thoroughly consider contacting us for a free consultation. Together, we attempt to get your house back after the foreclosure sale.
In a Judicial Foreclosure
New York requires judicial foreclosures. When you receive notice that the foreclosure auction has been held, you can file an Order to Show Cause, explaining your allegations and reasoning as to why the sale should be reversed or stayed. As stated above, this order requires you to show good cause. Examples of proper grounds recognized by the State of New York are provided below.
In a Nonjudicial Foreclosure
Unless your mortgage has a “power of sale” clause that you signed, New Yorkers usually do not have nonjudicial foreclosures.
Grounds for Setting Aside a Foreclosure Sale
Like previously stated, there must be good cause to set aside a foreclosure sale. Below are a few examples of proper grounds. If you defaulted on the foreclosure lawsuit, you should try to vacate the default with the help of a foreclosure attorney.
Irregularity in the Foreclosure Process
There are several places irregularities may arise from the foreclosure process:
- Pre-foreclosure notice did not fit State requirements.
- Notice for Summons was not clearly distinguished in large, bold letters.
- Summons was not properly delivered to you, following service requirements.
With our help, we can review all of your foreclosure paperwork to make sure it was done properly. You can fill out a free consultation form on our website, and we can help you get started right away.
Noncompliance With Terms of the Mortgage
It is possible that your lender breached your contract, engaged in fraudulent and predatory lending practices, did not provide you with foreclosure relief options, recorded your credit information negligently or maliciously, or misguided you during the application process. All of these examples would allow you to have good cause to sue your lender.
Inadequacy of Sale Price
Another good cause to sue would be if the lender sold the foreclosed home much, much less than the market value.
Get Legal Advice about Rescinding a Foreclosure Sale
If you are one of these New Yorkers wondering if you can reverse a foreclosure sale, get a free consultation from a foreclosure attorney. The Law Office of Yuriy Moshes, P.C. can be the guidance you need to get your house back through the right of redemption after a foreclosure or setting aside the foreclosure sale.
Once the sale date has passed, the foreclosed home is transferred to the highest bidder at the auction. The eviction process begins once the sale date has passed.
You are not evicted from your foreclosed home until the foreclosure sale has finalized. After the sale has occurred, you can set aside the sale by requesting the court to do so. Get the help of a foreclosure attorney so you can efficiently keep your house after foreclosure.
No, if your home was sold more than market value + fees and other costs, then you get the remaining amount.
There are several options that can help you stop the foreclosure sale date. Negotiating a loan modification, requesting a deed-in-lieu, making a short sale, suing your lender, or filing for bankruptcy are some of the options available to you. Contact The Law Office of Yuriy Moshes, P.C. for a free consultation, and together, we can decide what option is best for your home.
The homeowner may have successfully redeemed their home, and the lender canceled the auction.