Seventh Stage (7A): Successful Settlement Conference
If your Settlement Conference has been successful and you’ve worked out a mutually agreed deal with the Bank, the process of foreclosure will be discontinued. It’s up to the Bank to file a ‘Stipulation of Discontinuance’; a document advising the Court that the Bank does not intend pursuing the foreclosure. Plus, the Bank will file a ‘Cancellation of the Lis Pendens’, ensuring that land records at the local County Clerk’s office accurately reflect the discontinuation of the foreclosure proceedings.
Seventh Stage (7B): Unsuccessful Settlement Conference
If you fail to resolve this issue with the Bank at your Settlement Conference, the Bank will request an ‘Order of Reference’. This is the next step in the foreclosure process. If you filed an Answer, the Bank will file a ‘Summary Judgment Motion’, and if you did not file an Answer, the Bank will file a ‘Default Motion’. Both of these permit the foreclosure to proceed against you, with a referee being appointed to determine the amount due and owing under the Note and the Mortgage. The Bank will then move for a Judgment of Foreclosure and Sale, allowing them to sell your property.
Eighth Stage: Post Judgment
The default must be cured within three months following the Notice of Default; otherwise the bank or its representative can set a date for your home to be sold at auction: this is known as a Trustee Sale. The Notice of Trustee Sale will be recorded with the County Recorder’s Office and delivered to the homeowner: it will also be published in the local newspaper and posted on the door of the property – just to ensure everyone knows when and where the auction will be held. The auction will be held in the trustee’s office or on the steps of the county courthouse. In some States the homeowner has the ‘right to redemption’ right up to the moment the home sells at auction; meaning he has the right to stop the foreclosure process by coming up with the outstanding money.
The home will be sold to the highest bigger at the auction. Of course there’s a catch to these auctions because in most States cash payment is required, and very few third-party purchasers can afford to pay in full with cash at the Courthouse. This results in many lenders either inking an agreement with the homeowner to take their property back, known as a ‘deed-in-lieu of foreclosure’, or purchasing it themselves at the auction.
If you live in Queens, Brooklyn, or New York City, George Russo and Associates is your local real estate law firm. We’re highly qualified with many years’ experience, so if you’re confused, or require legal advice or assistance, don’t hesitate to contact us. We’ll ensure that your rights are protected and that all documentation is in order.