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Can a bank in NY foreclose non-judicially vs. "through the court" on a mixed use property containing a single family home?

Albany, NY |
Filed under: Foreclosure

The property is mixed use- it contains restaurant and a residence which I live in. The RPAPL Article 14 has changed several times in the last few years w/regard to whether non-judicial disclosures are permitted in NY and when, and I'm just not sure what could happen in my situation. Mortgage was signed w/Key Bank in 2010. Not sure it contains power of sale clause but im going to assume it does cause most mortgages do in some form or another. I defaulted in Feb with non-payment and I received a letter from the bank asking for the return of the collateral (the property at issue).

Attorney Answers 2

Posted

Typically, in a case as you have described, the process would be "judicial" foreclosure proceeding; however, the only way to be fairly certain is to carefully review and inspect the original mortgage, promissory note and any additional addenda contained therewith.

Essentially, it would behoove you to immediately seek counsel to at least review said original documentation and to advise you on your current options. Should you have any further questions, comments or concerns, feel free to reach out anytime.

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2 comments

Gerasimos Stamoulis

Gerasimos Stamoulis

Posted

Thank you Mr. Young. I just located my mortgage agreement and a power of sale clause does in fact exist front and center on page 1 with the caveat "to the extent applicable by law". The question now becomes whether the law protects mortgagors whose residence is a part of the mixed use commercial property from non-judicial foreclosures or is this means of foreclosure still available to the bank?

Ivan E. Young

Ivan E. Young

Posted

Essentially, what is going to happen is either: (A) the lender will try and commence a non-judicial action (prob. a lower chance of happening); (B) initiate a judicial foreclosure action through the commercial part of the county Supreme Court (prob. a higher chance of happening) and immediately move for the appointment of a receiver to collect any/all rents; or (C) commence a judicial foreclosure proceeding as a residential foreclosure (highly unlikely). Either way, without a crystal ball, all you can do is plan and react accordingly. Like I said earlier, it will be in your best interest to seek counsel for advice and then possibly retain said counsel.

Posted

I would immediately seek counsel. Any time in a foreclosure matter, time is of the essence. You need an attorney to look over the documents to be sure. Most likely foreclosure would be through the courts.

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