If you live in New York, you may be confused with all the changing rules affecting foreclosures during and after the pandemic. If you’re going through the foreclosure process, here is some information you should know about possible foreclosure defenses.
What Happened to Foreclosure Procedures During the Moratorium?
During the height of the pandemic in the US, all foreclosure cases pretty much stopped in their tracks. The CARES (Coronavirus, Aid, Relief, and Economic Security) Act helped keep homeowners with federally backed mortgages from being foreclosed upon during the worst of the COVID-19 pandemic, and those with private mortgages were helped by most of the court systems shutting down and then dealing with a multi-year backlog. Even once the federal foreclosure moratorium expired (in the Fall of 2021), New York state extended its moratorium until this past January 15, 2022.
What was AO262/21?
Administrative Orders (AO) come from the Chief Administrative Judge of the New York State Unified Court System. AO262/21was the order to stay most foreclosure cases in New York and was signed off on September 9, 2021. (see Administrative Order of The Chief Administrative Judge of The Courts AO262)Mandates in AO262/21included:
Most of AO262/21expired when the New York foreclosure moratorium ended on January 15, 2022, but two important mandates were left active: Foreclosure Conferences and Local Foreclosure Auction Rules.
How Do Foreclosure Auctions Work?
What happens in the foreclosure process is that if you are unable to come to a settlement with your lender within your conferences, and the court sides with your lender, the next step is a foreclosure auction. The court will assign a Referee (a court-appointed lawyer) who will:
Foreclosure auctions are handled at a county level, and each has its own specific rules (you can find a master list of County Supreme Courts here).
Can You Still Stop a Foreclosure in the Auction Phase?
Right up until your property is sold in the auction, your foreclosure lawyer can still fight to stop the foreclosure. One of the tools your attorney can use to buy you more time to settle your debt is the knowledge of how local auction rules work. Your foreclosure lawyer can stay a sale with an Order to Show Cause if there is even a single step that is handled incorrectly.
Court Appointed Referees
The court will assign a Referee (a court-appointed lawyer) who will handle the foreclosure auction. The Referee needs to fill out a specific form with mandated details. For example, in Suffolk County, the Request for Foreclosure Auction Date form includes:
If any of this information is missing or proven incorrect, your foreclosure attorney will be able to stay the sale until it the form is completed correctly.
Scheduling & Timing
Unlike Suffolk County, which has several locations for its foreclosure auctions, Nassau County only uses one location, making the scheduling and timing of the auctions extremely important. As per Nassau County Rules Governing Public Foreclosure Auctions:
If you any reason the Referee schedule the foreclosure auction incorrectly, your foreclosure attorney will be able to stay the sale until the timing is corrected.
Notices & Publications
Once a date and time are scheduled for the foreclosure auction, this information must be published. This includes posting the information on the court’s website, printed in local newspapers, and sent directly to all parties involved in the foreclosure procedure. From the rules in Kings County (Brooklyn):
If the notice is not published at the correct deadline, is not posted where it should be posted, or is not sent to all parties, your foreclosure attorney will be able to stay the sale until the posting is corrected.
Many county and district courts follow the New York State Unified Court System COVID-19 Protocols (recently updated on June 15, 2022), but some have specific rules when it comes to foreclosure auctions. In Queens, the courts are still following strict COVID-19 protocols including:
Even on the day of your foreclosure auction, if your foreclosure attorney can prove that mandated safety protocols are not being followed, the auction can be canceled, and the entire auction process will have to start over from the beginning.
Pursuant to the requirements of AO 262/21 for local NYS Supreme Courts to have their own rules regarding foreclosure sales during a period where Covid-19 is still a lingering risk, the Supreme Courts (among others) for Queens, Brooklyn, Nassau County, and Suffolk County New York (see links to each court’s rules) each have implemented their own local Covid 19 Rules for the Conduct of Foreclosure Sales designed to regulate the timing, frequency, notice, conduct, mask requirements and other details of such sales. The rules state and/or imply that if a foreclosure sale cannot follow these rules it would need to be postponed.
Your foreclosure attorney should be able to review every step of the auction process, from the Referee’s paperwork to the on-site auction protocols, and can stop the foreclosure process in its tracks if something isn’t right. Even immediately after the sale, if the buyer doesn’t have the right payments or paperwork on hand, the sale can be canceled and the auction rescheduled, giving you additional time to negotiate.
What to Do Next
All the moratoriums are over, and the courts are active again. If you have received notice that your home may be in danger of being foreclosed upon, you need to get a foreclosure attorney on your side as soon as you can. Reach out to New York foreclosure attorney Ronald Weiss for a free consultation. He can tell you what you need to know about the foreclosure process in New York and help you get your case started. Call 631-271-3737 and take the first step to a fresh start.