Foreclosure is a legal process by which a lender attempts to recover the outstanding balance on a mortgage loan by selling the property that serves as collateral. In the state of New York, the statute of limitations for foreclosure is the amount of time a lender has to initiate a foreclosure action after the borrower defaults on their mortgage loan. Understanding the foreclosure statute of limitations in New York is crucial for homeowners facing financial difficulties, as well as for lenders seeking to recover their investments. This Eastcoastlaws.com article will provide an overview of the foreclosure statute of limitations in New York and its implications for both homeowners and lenders.
What Is The New New York foreclosure law?
The state of New York has recently enacted a new foreclosure law that aims to provide additional protections to homeowners facing financial difficulties. This law, known as the “New York State COVID-19 Emergency Eviction and Foreclosure Prevention Act of 2020,” was enacted in response to the economic turmoil caused by the COVID-19 pandemic. The law also provides several other protections to homeowners facing financial difficulties. For example, the law requires lenders to offer loan modification programs to eligible homeowners and to provide them with a reasonable amount of time to apply for these programs. The law also imposes restrictions on late fees and penalties that can be charged to homeowners who are behind on their mortgage payments.
The new law also includes provisions to protect renters who are facing eviction due to financial difficulties. The law extends the notice period for eviction from three to 30 days, giving renters more time to find a new place to live. Additionally, the law provides financial assistance to renters who are facing eviction due to financial difficulties, including the COVID-19 Emergency Rental Assistance Program.
“The New York State COVID-19 Emergency Eviction and Foreclosure Prevention Act of 2020 is a new law that provides additional protections to homeowners and renters facing financial difficulties due to the COVID-19 pandemic. The law temporarily suspends the foreclosure statute of limitations, requires lenders to offer loan modification programs, imposes restrictions on late fees and penalties, and provides financial assistance to renters facing eviction.”
The new foreclosure law in New York is an important step in providing additional protections to homeowners and renters facing financial difficulties due to the COVID-19 pandemic. However, it’s important for homeowners and renters to understand their rights and responsibilities under this law, as well as their options for seeking financial assistance. Legal professionals can provide guidance and support to individuals facing financial difficulties, helping them to navigate the complexities of the foreclosure process and protect their rights and interests.
Foreclosure Statute Of Limitations In New York
In New York, the statute of limitations for foreclosure on a mortgage loan is six years. This means that a lender must initiate a foreclosure lawsuit within six years from the date of the borrower’s default on their loan.
The relevant statute can be found in New York’s Civil Practice Law and Rules (CPLR) section 213(4), which states:
“An action to foreclose a mortgage must be commenced within six years after the cause of action accrued.”
In other words, the six-year clock starts ticking from the date of default, which is usually defined as the date the borrower misses their first mortgage payment. However, it’s important to note that the statute of limitations is an affirmative defense that the borrower can raise in court, and it’s up to the lender to prove that the suit was brought within the allotted time.
It’s also worth mentioning that the statute of limitations for foreclosure in New York is subject to various exceptions and tolling provisions. For example, if the borrower and lender reach a written agreement to extend the loan, the statute of limitations may be temporarily suspended. Additionally, if the borrower files for bankruptcy, the statute of limitations may be tolled, meaning that the six-year time period is paused until the bankruptcy proceedings are resolved.
The limitation is also subject to various exceptions and tolling provisions that can impact the amount of time a lender has to initiate a foreclosure lawsuit. Borrowers facing foreclosure should seek the advice of a knowledgeable attorney to understand their rights and options.
How Do I Get Out Of Foreclosure In NY?
If you are facing foreclosure in New York, there are several options available to you that may help you avoid losing your home. Some of these options include:
- Loan Modification: You may be able to negotiate with your lender to modify the terms of your loan, such as reducing your monthly payment, extending the loan term, or lowering the interest rate. This can make it easier for you to keep up with your mortgage payments and avoid foreclosure.
- Refinance: If you have equity in your home and good credit, you may be able to refinance your mortgage to a lower interest rate or longer term, which can reduce your monthly payment and help you avoid foreclosure.
- Short Sale: If you are unable to make your mortgage payments and owe more on your mortgage than your home is worth, you may be able to sell your home through a short sale. In this type of sale, the lender agrees to accept less than the full amount owed on the mortgage.
- Deed in Lieu of Foreclosure: In some cases, you may be able to avoid foreclosure by transferring ownership of your home back to the lender. This is known as a “deed in lieu of foreclosure” and may be an option if you are unable to sell your home through a short sale or refinance.
- Bankruptcy: Filing for bankruptcy can temporarily halt the foreclosure process and give you time to reorganize your finances and work with your lender to find a solution.
It’s important to note that each of these options has its own advantages and disadvantages, and the best option for you will depend on your individual circumstances. To get the most accurate and personalized advice, it’s recommended that you consult with a foreclosure attorney or a housing counselor.