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:

• If you completed a Hardship Declaration (stating that you were behind on payments due to COVID) your case would be stayed until the end of the moratorium.
• If your lenders think you lied on your Hardship Declaration, they have the right to a hearing to prove their case.
• Foreclosure conferences should continue, and settlements should be encouraged (click here to learn more about Foreclosure Conferences).
• Foreclosure auctions should continue, following local COVID protocols.
• Other foreclosures not covered by the moratorium can proceed as normal.

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:

• Report to the court on exactly what is owed to the lender.
• Publish a Notice of Sale in the local newspaper four weeks before the auction date.
• Run the auction on the date of the sale.

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:

• Index Number
• Title of the action
• Town Hall where the auction is to take place
• Plaintiff’s attorney
• Referee’s name and Telephone Number
• 1st Choice Requested date and time for the auction
• OPTIONAL: Alternative date and time (to be considered if 1st Choice is unavailable)

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:

• Auctions must be scheduled 30 minutes apart on the hour and half-hour on any date certain between the hours of 2:00 pm and 4:30 pm Monday through Friday (exclusive of court holidays) on the north side steps of the Nassau County Supreme Court, 100 Supreme Court Drive, Mineola, NY 11501.

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):

• A Notice of Sale must be submitted to the Foreclosure Department at least ten (10) days prior to the date of the auction. A copy of the Notice of Sale must simultaneously be sent to the owner of the equity of redemption at both his/her last known address and the property address. An affidavit of service of such notice shall be presented to the clerk on or before the auction sale.

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.

Safety Protocols

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:

• Temperature Screening – must be under 100°F.
• Answering COVID questions –

1. have you had a fever, cough, shortness of breath, or any flu-like symptoms?
2. have you tested positive for COVID-19 (or been in close contact with anyone diagnosed with COVID-19)?

• Face coverings – no one without a mask will be allowed inside the courthouse.

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.