Foreclosure is a judicial procedure allowing mortgage lenders to take ownership and/or possession of the debtor's real estate (which was used to secure the loan) in the event of nonpayment in Tappan, New York. When a house is foreclosed, it is normally sold at auction shortly thereafter. This is because banks normally want to get rid of the property as soon as possible, even if it means losing some money, and an auction is an simple way to do this.
In all states in the U.S., including New York, there is an option to go through foreclosure via judicial sale, in which a court supervises the sale, and makes sure that the proceeds first go to the lender, and then to any other entities that may have a lien or other interest in the property (in order of priority), and, finally, to the borrower, if anything is left. In many states, original mortgages are considered non-recourse loans, meaning that if the house is foreclosed and sold for less than the borrower owes, the bank cannot go after the debtor for the remainder. You should consult with an lawyer in Tappan, New York to see if this is the case. However, this normally doesn't apply if the mortgage has been refinanced.
How Can I Avoid Foreclosure in New York?
First of all, you shouldn't dismiss the problem. You should stay in contact with your bank, and be straightforward with them. Ignoring the issue will not make it go away. One should remember that banks typically don't want to take your house in Tappan. They issued your mortgage expecting to earn a profit on the interest. Taking possession of, and selling, your house is a last resort for them. Therefore, if you are straightforward with them about your financial situation, they are likely to make reasonable accommodations to keep you from defaulting.
If no deal can be worked out, or the mortgage payments have become prohibitive, you may consider a "short sale". While the lender has to consent to it, many will take a moderate loss if it means avoiding foreclosure (which lenders typically treat as a last resort). This allows you to sell the house for whatever price it can fetch on the current market, and hand the proceeds over to the bank. If the sale nets less than the balance, some or all of the deficiency may be forgiven. There is also the option of a "short refinance," which forgives a considerable portion of your mortgage debt, and refinances the rest.
How Can A Tappan, New York Attorney Help?
If you are worried about foreclosure, a good Tappan, New York real estate attorney may be able to help. An attorney can increase your chances of keeping your home, and help minimize the financial impact if keeping it proves impossible.