Foreclosures are handled differently on a state-by-state basis. The biggest difference is whether the foreclosures require approval by the court system.   About half the states in the U.S. are judicial foreclosure states, which means each foreclosure case is presented before a judge, and the judge will decide whether the bank can justify and legally foreclosure on the borrower.  In the state of New York, majority (if not all) of the foreclosure cases will go before a judge as New York is a judicial foreclosure state.

New York – Judicial Foreclosure State

Judicial foreclosure states typically favor the borrower.   It’s a costly process and takes a long time for banks to foreclosure on a borrower.  The lender typically files a lawsuit against the borrower typically about 2-3 months of delinquent mortgage payments.  The most painful part of the process for the lenders is in a down economy with so many cases of delinquent mortgages, it takes a long time to review each case and for the state to approval each foreclosure.  It’s not unusual for a foreclosure sale to take place about 12 to 18 months after borrower stops making payments, and that’s not including the cases where the borrower declares chapter 13 bankruptcy, which would drag the process out even longer for the bank to recoup their money.

Right To Redemption

Little known fact to some helpless borrowers is that in certain states, the law offeres a window of opportunity for the borrower a chance to save their home even after the foreclosure sale has taken place.  The is known as the redemption period, and the timeline for this redemption period various depending on each state laws.  The borrower is given an opportunity during this period to make up the delinquent payments and fees to save their home.  Unfortunately, New York does not require a right to redemption.