In New York, loans for real property are secured through mortgages rather than
through deeds of trust. New York, unlike trust states, is a judicial foreclosure state. Only 10 states, Maine, New York, Connecticut, New Jersey, Pennsylvania, Ohio, Indiana,South Carolina, Florida, and Louisiana and North Dakota are judicial foreclosure states. Simply put, most foreclosure proceedings in New York must go through the courts before a property can be sold at public auction. On average, it takes 12-18 months after a lis pendens (notice of mortgage default) has been filed for a foreclosure proceeding to move through the court system and the property to end up on the auction block.
What is the reason it takes 12-18 months (sometimes longer!) for a foreclosure
proceeding to move through the courts? In a nutshell, all parties named in the action (including other mortgage holders, creditors, tenants of the owner, etc.) must be served with papers.
Lis Pendens for Mortgage Default: After a mortgage has gone unpaid for 3 consecutive months, the lender (Plaintiff) files a lis pendens and the mortgagor (Defendant) is served with a summons and complaint. In simple language, the mortgage holder (now the Plaintiff in the action) sues the borrower (now the Defendant in the action) for nonpayment of the mortgage.
If the Defendant (also called the mortgagor) fails to respond to the Summons and
Complaint issued by the Plaintiff, then the Plaintiff's attorney must submit a report to the court stating the facts of the case and requesting that the court appoint a Referee (an attorney who ultimately conducts the foreclosure sale). The referee issues a report that includes a computation of the amount due the lender. The judge then signs a Judgment of Foreclosure and Sale that directs a Notice of Sale to be published and the referee to sell the property at auction. The court then assigns a date and time for the auction and the auction date and time is published in the Notice of Sale in a local newspaper approximately 4 weeks prior to the auction.
Once the auction occurs, the homeowners will no longer be the owners of the house that has been foreclosed. The winning bidder at auction becomes the new owner and will be able to proceed with the eviction, once the sale is confirmed.