Real Estate Finance
The legal process by which a lender seizes and sells a property to recover unpaid mortgage debt after the borrower defaults.
Foreclosure is the legal process a lender uses to recover a mortgage debt when the borrower defaults. New York is a judicial foreclosure state, meaning the lender must file a lawsuit and obtain a court order to foreclose. The property is then sold at public auction. The borrower has a right of redemption before the sale. If the sale price does not cover the debt, the lender may seek a deficiency judgment for the remaining balance. New York foreclosure proceedings can take over a year due to mandatory settlement conferences and court backlogs.
Exam Tip
NY = judicial foreclosure (court action required). The borrower has the right of redemption until the sale. Know the difference between judicial and non-judicial foreclosure.
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Real Estate Finance
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