Real Property Actions & Proceedings

* ARTICLE 14

FORECLOSURE OF MORTGAGE BY POWER OF SALE
Section 1401. When mortgage may be foreclosed.
1402. Notice of intention to foreclose.
1403. Notice of pendency of non-judicial proceeding for
foreclosure by power of sale.
1404. Contents of notice of sale.
1405. Notice of sale; how given.
1406. Notice of sale; how served.
1407. Sale; how postponed.
1408. Sale; how conducted.
1409. Mortgagee or successor in interest may purchase.
1410. Right to redeem of mortgagor, subordinate lienor, or
holder of subordinate interests.
1411. Effect of sale.
1412. Conveyance.
1413. Distribution of proceeds of sale.
1414. Report of sale.
1415. Filing of report of sale.
1416. Multiple collateral; designation of order of sale of
parcels.
1417. Costs and expenses allowed.
1418. Application for surplus.
1419. Deficiency judgment.
1420. Receiver.
1421. Right to seek judicial intervention; mortgagee`s liability
for failure to comply with this article.
* NB Repealed July 1, 2005

* S 1401. When mortgage may be foreclosed. 1. A mortgage upon real
property situated within the state, excepting a mortgage on real
property improved solely by (a) a residential building containing less
than six dwelling units, including structures and improvements
appurtenant thereto, or (b) a residential condominium unit in a
residential building owned in a condominium form of ownership, or (c) a
residential building, including structures and improvements appurtenant
thereto, owned by a qualified cooperative apartment corporation, or (d)
a building located in a city with a population of one million or more
where the number of units occupied by residential tenants is equal to or
greater than sixty-five per centum of the total number of units in the
building, containing a provision that, upon a default of the mortgage,
or the note, bond or other obligation secured thereby, the mortgagee
shall have the right to sell the mortgaged property, may be foreclosed
in the manner prescribed in this article for a non-judicial proceeding
for foreclosure by power of sale, where the following requisites occur:
(1) Default has occurred under the mortgage and the outstanding
indebtedness has been declared immediately due and payable by written
notice to the mortgagor given in the manner required by the mortgage.
(2) An action has not been brought to recover the debt secured by the
mortgage, or any part thereof, or to foreclose the mortgage under
article thirteen of this chapter; or, if an action on the debt has been
brought, it has been discontinued or dismissed without prejudice against
the plaintiff, or an execution, issued upon a judgment rendered therein
in favor of the plaintiff, has been returned wholly or partly
unsatisfied.
(3) The mortgage has been duly recorded in accordance with article
nine of the real property law in the land records in the county where
the property is situated.
(4) The first notice of sale has been published within the time in
which an action could be commenced to foreclose such mortgage.
2. Non-judicial foreclosure by power of sale pursuant to this article
shall not be available to a mortgagee holding a mortgage on property
containing residential apartment units where the mortgagee seeks, in and
by the non-judicial foreclosure of the mortgaged property or as a result
thereof, to foreclose, terminate, modify, or impair the tenant`s
interests in any leases for residential units in the mortgaged property
or the tenant`s possessory rights pursuant thereto.
* NB Repealed July 1, 2005

* S 1402. Notice of intention to foreclose. 1. Not later than ten days
after commencing the non-judicial proceeding by filing the notice of
pendency pursuant to section fourteen hundred three of this article, a
copy of the notice of pendency, together with a notice of intention to
foreclose, in a writing complying with subdivision two of this section
shall be sent to the mortgagor, the obligor on the note, bond or other
obligation if other than the mortgagor, the owner of the mortgaged
property, if other than the mortgagor, and to any person or entity
having a lien of record upon the mortgaged property, or interest in the
mortgaged property subordinate to the mortgage that the mortgagee seeks
to foreclose, at the time of the filing of the notice of pendency of
which the mortgagee has actual knowledge or is on constructive notice,
both by (a) registered mail or certified mail and (b) ordinary first
class mail, or by personal service in the same manner as service of a
summons. Such notice shall be sent to the owner of the mortgaged
property at the address of the property or at such other address that is
known to the mortgagee, to a mortgagor at the mortgagor`s address
specified in the mortgage or to such other place as may have been
directed by the mortgagor in writing in accordance with the mortgage,
and to any person or entity having a lien of record subordinate to the
mortgage that the mortgagee seeks to foreclose at the address shown on
such lien. The notice shall be sent to a person or entity having any
subordinate interest in the mortgaged property that the mortgagee seeks
to foreclose and of which the mortgagee has such actual knowledge or
constructive notice at such person`s or entity`s last known personal or
business address.
2. The notice shall:
(a) identify the mortgage by the parties thereto, the date and
recording date thereof, and any recorded amendments and modifications
thereof;
(b) (1) if there is a monetary default, set forth the amounts due, the
date due and any late charges and default interest;
(2) if there is a non-monetary default, set forth the basis thereof;
(c) state that the mortgagee has (1) made demand to cure a default if
such demand is required under the mortgage or the note, bond or other
obligation secured thereby, which default has not been cured within the
applicable cure period, and (2) declared the entire obligation secured
by the mortgage to be immediately due and payable by written notice to
the mortgagor;
(d) set forth the outstanding principal balance declared due and
payable, together with the amount of interest accrued thereon and the
approximate amount of other sums secured by the mortgage;
(e) state that the interest in the mortgaged property of the mortgagor
and all persons or entities having an interest in the mortgaged property
subordinate to the mortgage, who are served with a copy of the notice of
intention to foreclose and any other notices required under this
article, will be terminated by foreclosure of the mortgage by power of
sale pursuant to this article and that the mortgagor, owner, or such
other person or entity having an interest in the mortgaged property
subordinate to the mortgage, may thereupon be evicted by judicial
process;
(f) set forth the right of the mortgagor, or any person or entity
having an interest in the mortgaged property subordinate to the
mortgage, to any surplus moneys out of the proceeds of sale in
accordance with the provisions of section fourteen hundred eighteen of
this article; and, if a deficiency judgment is permitted, that the
mortgagee shall have the right to seek a deficiency judgment pursuant to
section fourteen hundred nineteen of this article;
(g) set forth the rights and remedies, as specified in section
fourteen hundred twenty-one of this article, which are available to the
mortgagor, or any person or entity claiming under the mortgagor or
having an interest in or lien upon the mortgaged property which is
subordinate to the mortgage being foreclosed; and
(h) where the United States of America, the state of New York, or any
municipality, agency or instrumentality of any of them, is entitled to
notice, the notice shall specify with particularity the nature of the
interest or lien of the governmental entity. The non-judicial proceeding
under this article shall be deemed to be an action, for purposes of
statutes conferring jurisdiction over governmental entities.
3. Affidavits of service or mailing upon each of the persons or
entities entitled to and served with the notice of intention to
foreclose shall be filed prior to the date of sale under the index
number of the non-judicial proceeding with the clerk of the county in
which the sale is to take place.
* NB Repealed July 1, 2005

* S 1403. Notice of pendency of non-judicial proceeding for
foreclosure by power of sale. 1. The mortgagee shall, prior to the first
service of the notice of intention to foreclose, purchase an index
number in the office of the county clerk of the county in which the sale
is to take place and file in the clerk`s office of each county where the
mortgaged property is situated a notice of the pendency of the
non-judicial proceeding for foreclosure by power of sale which shall, in
addition to the applicable requirements of article sixty-five of the
civil practice law and rules, specify the date of the mortgage, the
parties thereto, the time and place of recording, the name of the record
owner of the mortgaged property, the names of any subordinate lienors or
holders of subordinate interests entitled to notice of the sale, the
object of the proceeding for foreclosure of the mortgage by power of
sale, and a description of the mortgaged property, including the number
of each block and lot on the land map of the county which is affected by
the notice. If the notice is filed in more than one county, the notice
shall designate the county in which the sale is to take place. The
provisions of article sixty-five of the civil practice law and rules
requiring the service and filing of a summons shall not be applicable to
a non-judicial proceeding for foreclosure by power of sale pursuant to
this article.
2. The filing of the notice of pendency shall be deemed to be the
commencement of the non-judicial proceeding for foreclosure by power of
sale pursuant to this article.
3. The notice of pendency shall be effective for a period of three
years from the date of filing. Before expiration of a period or extended
period, the court, upon motion of the mortgagee and upon such notice as
the court may require, may, for good cause shown, grant an extension for
an additional three year period. An extension order shall be filed and
indexed before expiration of the notice of pendency. In the event the
sale has not taken place prior to the expiration of a pendency period,
and a lapse in extending the notice of pendency has occurred, a new
notice of pendency may be filed upon a court order from the supreme
court in the county in which the sale is to take place, on a showing
that no person or entity has been prejudiced by the failure to extend
the notice of pendency. In the event that a person or entity shall have
acquired, after the expiration of a notice of pendency and before
another shall be filed, an interest in or lien upon the mortgaged
property which is subordinate to the mortgage, such person or entity
shall be entitled to notice of the sale.
4. The filing of the notice of pendency shall be deemed to be
conclusive record notice to any tenant or occupant who takes possession
of all or a part of the mortgaged property, or any person who or entity
which acquires an interest in or lien upon the mortgaged property, or
any part thereof, after the filing of the notice of pendency and all
such persons or entities shall be bound thereby and by the non-judicial
proceeding pursuant to this article.
* NB Repealed July 1, 2005

* S 1404. Contents of notice of sale. The notice of sale shall
specify:
1. The names of the mortgagor and record owner, if other than the
mortgagor, the mortgagee, and of each assignee of the mortgagee.
2. The date of the mortgage, the date when and the place where it was
recorded, and the book and page or index in which it is recorded and the
dates and recording information pertaining to each assignment of the
mortgage.
3. The identity of holders, if any, of subordinate interests in the
mortgaged property which the mortgagee seeks to foreclose which are
recorded or of which the mortgagee has actual or constructive notice at
the time of the filing of the notice of pendency, and the nature of such
subordinate interests.
4. The outstanding principal sum claimed by the mortgagee to be due
upon the mortgage, together with accrued interest thereon, late charges,
other sums due under the mortgage, and sums advanced by the mortgagee
recoverable under the mortgage including the costs of sale and
reasonable attorneys` fees and disbursements, at the time of the first
publication of the notice.
5. A legal description of the mortgaged property, the street address,
and the block and lot or other tax or tax map identification.
6. If the mortgaged property consists of two or more distinct parcels,
unless the mortgage provides that the parcels shall be sold as one
parcel, the notice of sale shall specify the order in which the parcels
shall be sold.
7. That the owner has the right, up to and including the time of the
sale, to redeem the mortgaged property upon payment to the mortgagee of
the outstanding principal balance secured by the mortgage, together with
interest accrued thereon, and all other sums due thereunder, including
the costs of sale and reasonable attorneys` fees and disbursements.
8. The date, place and time of sale.
* NB Repealed July 1, 2005

* S 1405. Notice of sale; how given. Notice that the mortgage will be
foreclosed by a sale of the mortgaged property, or a part thereof, at a
time and place specified in the notice, shall be given in the following
manner:
1. A copy of the notice shall be served, as prescribed in section
fourteen hundred six of this article, upon:
(a) the mortgagor;
(b) the obligor on the note, bond or other obligation, if other than
the mortgagor;
(c) the owner of the mortgaged property, if other than the mortgagor;
(d) any other person or entity in the mortgage designated to receive
notice;
(e) a subsequent lienor of the mortgaged property that the mortgagee
seeks to foreclose whose interest was recorded or docketed in the proper
office for recording or filing in the county in which the mortgaged
property is located at the time of the filing of the notice of pendency;
(f) any person having a lien upon or interest in the mortgaged
property, or any part thereof, at the time of the filing of the notice
of pendency that is subordinate to the mortgage and that the mortgagee
seeks to foreclose. Affidavits of service or mailing upon each of the
persons or entities entitled to notice of the sale shall be filed prior
to the date of sale under the index number of the non-judicial
proceeding with the clerk of the county in which the sale is to take
place.
2. A copy of the notice of sale must be published at least once in
each week during the five successive weeks immediately preceding the
date of sale, or at least twice in each week during the four successive
weeks immediately preceding the date of sale, in a newspaper of general
circulation distributed in the county in which the property to be sold,
or any part thereof, is situated, or if no newspaper is distributed in
such county, then in a newspaper distributed in an adjoining county,
except that where such property is located in a county wholly contained
within a city with a population of one million or more, such notice of
sale shall be published in the same manner as a notice of judicial
proceeding in a newspaper distributed within such county to be
designated by the clerk of such county. Any period of seven successive
days shall constitute a week under this section.
3. A copy of the notice of sale must be filed on or before the day of
first publication of the notice of sale with the clerk of each county
wherein the mortgaged property, or any part thereof, is situated.
4. The publication provisions of this section shall be followed in
lieu of the provisions of section two hundred thirty-one of this chapter
respecting the publication of a notice of sale.
* NB Repealed July 1, 2005

* S 1406. Notice of sale; how served. Service of notice of the sale as
prescribed in subdivision one of section fourteen hundred five of this
article shall be made upon a person or entity described in subdivision
one of section fourteen hundred five of this article that the mortgagee
seeks to foreclose as follows:
1. At least thirty days before the date of sale, by delivering a copy
of the notice, in the manner prescribed by article three of the civil
practice law and rules for personal service of a copy of a summons in a
civil action in a court of record, to the person or entity to be served,
and by mailing an additional copy thereof to such person or entity by
first class mail in an envelope bearing the legend "personal and
confidential" and not indicating on the outside thereof, by return
address or otherwise, that the communication is from an attorney or
concerns an action or proceeding against the person or entity to be
served. If such person or entity is a foreign corporation, or is not a
resident of or within the state, then service thereof may be made upon
it in like manner without the state, at least forty days before the date
of sale.
2. Service of a copy of the notice of sale upon the mortgagor, the
mortgagor`s successors or assigns, or a subsequent grantee of the
property from the mortgagor, in the manner prescribed in the mortgage
shall be good, valid and effective service hereunder.
3. Service of a copy of the notice of sale upon the United States of
America, its agencies or instrumentalities, shall be in accordance with
applicable federal statute.
* NB Repealed July 1, 2005

* S 1407. Sale; how postponed. 1. The sale may be postponed by the
mortgagee for a period of time not to exceed five weeks. Notice of
postponement of the sale shall be published at least once not less than
five days prior to the new date of the sale in the newspaper in which
the original notice was published, and shall be served in the manner set
forth in section fourteen hundred six of this article upon each person
upon whom or entity upon which the original notice of sale was served.
2. The sale may also be postponed if the person designated to conduct
the sale does not appear on the date scheduled for the sale, in which
case notice of the adjourned date shall be published and served as
provided in subdivision one of this section.
3. If the sale is stayed by application of any other law, then at such
time as the stay shall be vacated or lifted, an adjourned sale may be
scheduled by the mortgagee and publication of the notice of sale shall
be made as prescribed in subdivision two of section fourteen hundred
five of this article.
4. The sale may be postponed by the mortgagee more than once. The
manner of the postponement and the publication and service of notice
thereof shall be effected in accordance with the provisions of
subdivision one of this section.
* NB Repealed July 1, 2005

* S 1408. Sale; how conducted. 1. The sale shall be at public auction
by a licensed auctioneer, sheriff, marshal, or court appointed official
for such purpose, during reasonable business hours, on a day other than
Saturday, Sunday or a public holiday, in the county in which the
mortgaged property, or a part thereof, is situated, at any courthouse
located in the county, or if in a county within the city of New York, at
the courthouse of the supreme court in such county.
2. If publication of the notice of sale is for four weeks, such sale
shall take place on any day on or after the twenty-eighth day and on or
before the thirty-fifth day after the day of the first publication; and
if publication of the notice of sale is for five weeks, such sale shall
take place on any day on or after the thirty-fifth day and on or before
the forty-second day after the day of the first publication. Any period
of seven successive days shall constitute a week under this section.
3. The person conducting the sale shall announce the terms thereof at
the outset of the auction. A copy of the terms of sale shall be made
available by the mortgagee or person conducting the sale at or prior
thereto.
4. On acceptance of a bid at the sale, the bidder, other than the
mortgagee, shall deposit with the person conducting the sale at least
ten percent of the bid price in cash, certified check or a bank check
drawn on a bank, trust company, savings bank or savings and loan
association having offices in this state. A memorandum of the sale,
which shall incorporate the terms of the sale, shall be executed by the
person conducting the sale and the successful bidder thereat, including
the foreclosing mortgagee. The memorandum shall state the identity of
the purchaser, the amount of the successful bid, the amount of the
deposit (which, pending the conveyance of title, shall be retained by
the person conducting the sale in a separate account in a commercial
bank or savings bank located in the state of New York), the date, time
and place of closing of title and that the terms of the sale are
incorporated therein. The memorandum of sale shall not be amended or
modified.
5. If the successful bidder fails to make the deposit on acceptance,
or to complete the transaction within thirty days after acceptance, the
mortgagee may resell the mortgaged property. The bidder`s deposit may be
retained or recovered by the mortgagee as liquidated damages regardless
of the amount bid and paid on the resale of the mortgaged property.
6. If the mortgaged property consists of two or more distinct parcels,
they shall be sold separately in the order specified in the notice of
sale unless otherwise provided in the mortgage or any instrument
extending, amending or modifying the mortgage. As many of the parcels
shall be sold as it is necessary to sell in order to satisfy the amount
due at the time of the sale, and the costs and expenses allowed by
section fourteen hundred seventeen of this article. Where two or more
buildings are situated in the same city lot or local tax lot, they shall
be sold together.
* NB Repealed July 1, 2005

* S 1409. Mortgagee or successor in interest may purchase. The
mortgagee, or its assignee, or the legal representative of either, may
purchase the mortgaged property, or any part thereof, at the sale and
shall be entitled to bid. Upon any such bid up to the full amount of the
indebtedness secured by the mortgage, including unpaid interest, late
charges, costs of sale, reasonable attorneys` fees and disbursements,
and advances made to protect the lien of the mortgage, the mortgagee, or
its assignee, or the legal representative of either, shall not be
required to make any deposit at the sale or any payment of the amount of
the successful bid up to the full amount of the indebtedness secured by
the mortgage, upon the delivery of the power of sale deed.
* NB Repealed July 1, 2005

* S 1410. Right to redeem of mortgagor, subordinate lienor, or holder
of subordinate interests. 1. At any time before the commencement of the
bidding at the sale, the mortgagor, or the record owner of the mortgaged
property, or the holder of any subordinate security interest in or other
lien upon the mortgaged property, may prevent the sale by payment to the
mortgagee, in good funds, of all sums due under the mortgage, or the
note, bond or other obligation secured thereby, together with accrued
interest thereon, and all other sums due thereunder, including the costs
of sale and reasonable attorneys` fees. As between or among holders of
security interests, the tender of redemption by the holder entitled to
priority prevails over the tender of redemption by the holder of a
subordinate interest.
2. If a mortgagor, record owner, or holder of any subordinate security
interest in or other lien upon the mortgaged property is entitled to
redeem under this section, the mortgagor, record owner, or the holder of
any subordinate security interest or lien, may, upon such redemption,
require the mortgagee, upon full payment of the obligation, in lieu of
the certificate of discharge under section two hundred seventy-five of
the real property law, to assign the debt and the mortgage without
recourse or warranty to any person or entity designated by the payor
provided that such person or entity is not the mortgagor or a person or
entity acting as a nominee of the mortgagor, and the mortgagee is
obligated to do so, provided the payor executes the affidavit required
under section two hundred seventy-five of the real property law. The
rights under this subdivision may be enforced by the holder of any
subordinate security interest in or lien upon the mortgaged property
even though it is a subordinate security interest or lien. The
assignment of the mortgage, and the indebtedness secured thereby, shall
be deemed to be an assignment of a bona fide obligation within the
meaning of section two hundred seventy-five of the real property law.
* NB Repealed July 1, 2005

* S 1411. Effect of sale. 1. A sale, made and conducted as prescribed
in this article, to a purchaser, including the mortgagee or the person
to whom or entity to which the purchaser or the mortgagee assigns the
terms of sale and memorandum of sale by assignment duly executed and
recorded, is equivalent to a sale pursuant to judgment in an action to
foreclose the mortgage under article thirteen of this chapter, and
except as respects the interest of the United States of America, which
shall be foreclosed as provided in subdivision four of this section, or
those residential tenants whose interest may not be foreclosed,
terminated, modified, or impaired pursuant to this article, immediately
upon the execution of the memorandum of sale of the person conducting
the auction, shall bar any claim or equity of redemption, upon, or with
respect to, the property sold, of each of the following persons or
entities:
(a) the mortgagor, or the mortgagor`s heirs, devisees, executors,
administrators, successors or assigns;
(b) each person claiming under any of them, by virtue of a title,
lien, tenancy, interest, encumbrance, judgment or decree, subsequent to
the mortgage, upon whom the notice of sale was served, as prescribed in
this article;
(c) each person so claiming, whose assignment, mortgage, conveyance,
tenancy, or other interest was not duly recorded in the proper book or
index for recording the same in the county in which the property is
situated, or whose judgment or decree was not duly docketed in the
county clerk`s office, at the time of the filing of the notice of
pendency of the sale pursuant to this article, and the executor,
administrator, successor or assignee of such a person;
(d) every other person, claiming under a statutory lien or
encumbrance, created, recorded or filed subsequent to the filing of the
notice of pendency, attaching to the title or interest of any person,
designated in any of the foregoing subdivisions of this section.
2. Nothing in this article shall bar or foreclose any claim upon or
interest in the mortgaged property sold of any person or entity whose
interest in or lien upon the mortgaged property arose prior to the
filing of the notice of pendency and who has not been served with a copy
of the notice of sale in the manner prescribed in this article.
3. A conveyance made in accordance with section fourteen hundred
twelve of this article to a purchaser at the foreclosure sale, including
the mortgagee, is not a fraudulent transfer by reason of the value given
being less than the value of the mortgagor`s interest in the mortgaged
property.
4. Where the United States of America, or any of its agencies or
instrumentalities, has a subordinate lien or interest of record in the
mortgaged property and is entitled to notice, the mortgagee shall obtain
an order from the supreme court in the county in which the sale is to
take place, after the time for the United States of America to appear
has expired, foreclosing the lien or interest of the United States. Upon
such order, the sale shall be deemed to be a judicial sale foreclosing
the lien or interest of the United States of America subject to the
rights of the United States of America pursuant to applicable statutes.
5. At any time within one year after the recording of the deed
executed and delivered pursuant to section fourteen hundred twelve of
this article, but not thereafter, a court, upon such terms as may be
just, but not inconsistent with other provisions of this article, may
set aside the sale for failure substantially to comply with the
requirements herein set forth as to notice, time, manner and publication
of such sale upon a finding that the failure prejudiced a substantial
right of any person or entity described in subdivisions one, two and
four of this section. In the event the sale has been made to a bona fide
purchaser other than the mortgagee or the mortgagee`s nominee or
assignee without notice of any irregularity of the sale, the sale shall
not be set aside unless there shall be a restitution to such purchaser
of the purchase price paid.
* NB Repealed July 1, 2005

* S 1412. Conveyance. 1. The person authorized to conduct the sale
pursuant to subdivision one of section fourteen hundred eight of this
article shall, at the closing of title held in accordance with the terms
of sale, execute and deliver a deed to the purchaser in the following
form:
POWER OF SALE DEED
THIS DEED, made as of the _______ day of ___________, _____, between
______________, in the capacity of auctioneer/sheriff/marshal/referee,
having an office at _________, ______________, New York ("Grantor") and
______________, a ____________ having an address at
____________________, ______________, _____________ ("Grantee"),
WITNESSETH:
That __________________("Mortgagee"), the owner and holder of the
mortgage described in Exhibit A attached hereto encumbering the property
described hereinbelow (the "Property"), and the note, bond or other
obligation secured thereby, has foreclosed the lien of said mortgage
pursuant to article fourteen of the real property actions and
proceedings law of the state of New York;
That Grantor has been designated by Mortgagee or by the court in the
county in which the sale has taken place to conduct the sale of the
Property;
That the sale was duly held on _______________ ___, ____, and the
memorandum of sale attached hereto as Exhibit B was executed at the
conclusion of the sale;
And that pursuant thereto and in consideration of ___________Dollars
($_____________) paid by Grantee, being the highest sum bid at the sale,
Grantor does hereby grant and convey to Grantee:
(Land Description of the Property)
TOGETHER with all right, title and interest, if any, of the Grantor in
and to any streets and roads abutting the above-described premises to
the center lines thereof; TOGETHER with the appurtenances and all the
estate and rights of the grantor in and to said premises; to have and to
hold the premises herein granted to the grantee, the heirs or successors
and assigns of the Grantee forever.
IN WITNESS WHEREOF, Grantor has hereunto set the Grantor`s hand and seal
the date first above written.
________________
(ACKNOWLEDGEMENT)
2. Before the deed is executed and delivered to the purchaser, the
mortgagee shall file the mortgage and any assignment not shown to have
been lost or destroyed in the office of the clerk, unless it is in a
form which can be recorded; in which case it shall be recorded in the
county or counties where the mortgaged property or properties are
situated; the expense of filing or recording and entry shall be allowed
in the costs to be recovered by the mortgagee pursuant to this article;
and, if filed with the clerk, he shall enter in the minutes the time of
filing.
3. The purchaser of the mortgaged property, upon a sale conducted as
prescribed in this article, thereupon obtains marketable title thereto,
in the same manner as a purchaser in a judicial foreclosure sale
pursuant to article thirteen of this chapter against all persons bound
by the sale.
* NB Repealed July 1, 2005

* S 1413. Distribution of proceeds of sale. 1. The proceeds of the
sale shall be distributed and paid by the person conducting the sale in
the following order:
(a) All taxes, water rates, sewer rents and assessments that are liens
upon the real property sold, and any liens or encumbrances placed by a
city agency or a municipality upon the real property that have priority
over the foreclosed mortgage.
(b) The costs and expenses of the sale, pursuant to section fourteen
hundred seventeen of this article.
(c) To the mortgagee, the amount of the debt, accrued interest
thereon, late charges, and all other sums advanced by the mortgagee
which are recoverable under the mortgage, including the costs of sale
and reasonable attorneys` fees and disbursements, or so much thereof as
the proceeds will pay. The person conducting the sale shall take the
affidavit of the mortgagee as to all of the foregoing amounts being due,
and the receipt of the mortgagee for the amount so paid, and file the
same with the report of sale.
(d) Upon entry of an order pursuant to section fourteen hundred
eighteen of this article providing for same, to the holder of any
subordinate mortgage or lien, or to the owner of the equity of
redemption or any person or entity having filed a notice of claim
against the property, from the then remaining proceeds the amount then
due to such person or entity, in the priority thereof, or so much as the
then remaining proceeds will pay.
2. All surplus moneys arising from the sale after payment of the
amounts due under paragraphs (a), (b) and (c) of subdivision one of this
section shall be paid to the county treasurer for the county in which
the sale took place by the person conducting the sale within five days
after the same shall be received, in like manner and with like effect as
if the proceeding to foreclose the mortgage occurred pursuant to article
thirteen of this chapter.
* NB Repealed July 1, 2005

* S 1414. Report of sale. 1. Within fifteen days after completing the
sale and executing the proper conveyance to the purchaser, the person
conducting the sale shall make a report of the sale, which shall state:
(a) the time when and the place where the sale was made;
(b) the sum bid for each distinct parcel separately sold;
(c) the name of the purchaser of each distinct parcel; and
(d) the name of each person or entity, court officer or other officer,
to whom proceeds of the sale was paid, and the sum thereof.
2. The report of sale shall contain:
(a) affidavit of the publication of the notice of sale, and of the
notice or notices of postponement, if any, by the publisher or printer
of the newspaper in which they were published, or by the publisher`s
foreman or principal clerk;
(b) copies of the affidavit or affidavits, of the service of copies of
the notice of intention to foreclose and the notice of pendency
theretofore filed with the clerk of the court; and
(c) the terms of sale and executed memorandum of sale.
3. The report shall specify the amount claimed to be due by the
mortgagee on the indebtedness secured by the mortgage, together with all
other sums recoverable under section fourteen hundred seventeen of this
article, the amount distributed by the person conducting the sale
pursuant to section fourteen hundred thirteen of this article, and to
whom, and the amount of the deficiency or surplus after application of
the proceeds of sale thereto. The report shall contain the mortgagee`s
affidavit specifying the amount claimed due by the mortgagee on the
indebtedness secured by the mortgage, together with all other sums
recoverable under section fourteen hundred seventeen of this article.
4. The matters required to be contained in any or all of the
affidavits specified herein may be contained in one affidavit, where the
same person deposes with respect to them. A copy of the notice of sale
shall be annexed to each affidavit.
* NB Repealed July 1, 2005

* S 1415. Filing of report of sale. 1. The report and affidavits
specified in section fourteen hundred fourteen of this article shall be
filed, in the same manner as the filing of the notice of pendency
pursuant to subdivision two of section fourteen hundred three of this
article, in the county clerk`s office in the county where the sale took
place within thirty days after the completion of the sale and execution
of the proper conveyance to the purchaser, and, as such, constitute
presumptive evidence of the matters of fact therein stated, with respect
to any mortgaged property sold which is situated in that county.
2. Each county clerk in this state in whose office reports of the
foreclosure of mortgages by power of sale have been or shall be filed
pursuant to the provisions of the foregoing subdivision of this section,
is hereby authorized to deliver certified copies of the same to the
purchaser of the mortgaged property on the foreclosure sale or to any
mortgagor, obligor on the note or bond, owner of, or any other person or
entity having a subordinate interest in or lien upon, the mortgaged
property which was foreclosed by the sale, upon request therefor.
* NB Repealed July 1, 2005

* S 1416. Multiple collateral; designation of order of sale of
parcels. Where the indebtedness is secured by more than one mortgage on
mortgaged property consisting of more than one functionally separate and
distinct property, unless otherwise provided in the mortgage or in any
extension, amendment or modification thereof or instrument amendatory
thereto, each property shall be sold either (a) separately in the order
designated by the mortgagee (which may be on a single sale date, or on
separate dates as provided in the notice of sale), or (b) as otherwise
directed by order of the supreme court for the county in which the sale
is to take place, pursuant to a motion made under the index number of
the non-judicial proceeding for foreclosure of power of sale. The
mortgagee shall not schedule or conduct the sale of the subsequent
property so designated until after the deficiency has been determined in
accordance with section fourteen hundred nineteen of this article,
whereupon in the event a deficiency exists, the mortgagee may schedule
and conduct the sale of the subsequent property in the order designated
by the mortgagee unless the court orders otherwise, such sale to be
conducted in accordance with the provisions of this article.
* NB Repealed July 1, 2005

* S 1417. Costs and expenses allowed. The mortgagee shall be entitled
to recover out of the proceeds of sale, or upon application for a
deficiency judgment, the costs and expenses of: (a) advertisement of the
notice of sale, as determined by paid receipts therefor; (b) service of
the notice of intention to foreclose and the notice of sale; (c)
preparation and filing of the affidavits required under this article,
the power of sale deed, and report of sale; (d) the conduct of the sale,
including the fee of the officer conducting the sale, which, except as
shall be directed by the court, shall not exceed one thousand dollars;
(e) recording of the deed if the mortgagee is the purchaser at the sale;
(f) filing or recording the mortgage if not theretofore paid for by the
mortgagor; and (g) the reasonable attorneys` fees incurred in connection
with the non-judicial proceeding under this article which, except as
shall be directed by the court, shall not exceed the sum of twenty-five
hundred dollars. Fees designated in this section in dollar amounts shall
be indexed in accordance with changes in the federal consumer price
index - all consumers, over base year nineteen hundred ninety-eight.
* NB Repealed July 1, 2005

* S 1418. Application for surplus. 1. Any person or entity claiming
the surplus moneys arising from the sale of the mortgaged property, or a
part thereof, may, within twenty days after the filing of the report of
the sale, file under the index number assigned to the non-judicial
proceeding in the office of the clerk of the county where the sale took
place, a written notice of the claim, stating the nature and extent of
the claim. Thereafter, an application, with proof of service upon the
mortgagor, the record owner of the mortgaged property, and any other
person who or entity which has filed a claim to the surplus moneys may
be made by any person who or entity which has filed a claim to the
surplus moneys, seeking an order directing payment thereof out of the
surplus moneys.
2. Upon such application, or at any time within three months
thereafter, on notice to all persons who or entities which have been
served with the notice of sale or filed claims to the surplus money, or
any part thereof, on motion of any person who or entity which has filed
a notice of claim to the surplus money, or any part thereof, the court,
by reference or otherwise, shall ascertain and report the amount due to
the applicant, or to any person who or entity which has a lien on or
claim to such surplus money, or any part thereof, and the priority of
the several liens or claims thereon, and shall order distribution of the
surplus moneys by the county treasurer.
3. The owner of the equity of redemption, or any person who or entity
which has responded to the application, or any person who or entity
which files a notice of claim or has a recorded lien against the
mortgaged property shall be given notice by mail or in such other manner
as the court shall direct, to attend any hearing on disposition of the
surplus moneys and shall have the right to receive distribution of the
surplus moneys, or any portion thereof, in any manner directed by the
court.
* NB Repealed July 1, 2005

* S 1419. Deficiency judgment. 1. Unless otherwise agreed by the
mortgagor and the mortgagee in the mortgage, a person who or entity
which owes payment of an obligation secured by the mortgage foreclosed
under this article is liable for the whole residue, or so much thereof
as the court may determine, of the debt remaining unsatisfied, after the
sale of the mortgaged property and the application of the proceeds, the
amount of the debt remaining unsatisfied to be determined by the court
as herein provided.
2. Not later than ninety days after the delivery to the purchaser of
the power of sale deed to the mortgaged property, the person to whom or
entity to which such residue shall be owing may make an application
under the index number assigned the non-judicial proceeding, in the
supreme court for the county in which the mortgaged property is located,
or in a county in which the sale has taken place for a deficiency
judgment against the persons or entities liable therefor upon notice to
such persons or entities. Such notice shall be served personally or in
such other manner as the court may direct. Upon such application, the
court, whether or not the person or entity claimed to be liable for the
residue appears, shall determine, upon reasonable appraisal by a real
estate appraiser licensed in the state of New York, or otherwise as it
shall direct, the fair and reasonable market value of the mortgaged
property as of the date the mortgaged property was bid on at auction or
such nearest earlier date as there shall have been any market value
thereof and shall make an order directing the entry of a deficiency
judgment against the person or entity liable therefor. Such deficiency
judgment shall be for an amount equal to the aggregate amount of the
indebtedness due to the mortgagee, together with all other sums
recoverable under section fourteen hundred seventeen of this article as
such shall be set forth in the report of sale pursuant to subdivision
three of section fourteen hundred fourteen of this article less the
higher of: (a) market value of the mortgaged property as determined by
the court or (b) the sales price of the mortgaged property at the public
sale.
3. If no application for a deficiency judgment shall be made as herein
prescribed, the proceeds of the sale regardless of the amount thereof
shall be deemed to be in full satisfaction of the mortgage debt, and no
right to recover any deficiency in any action or proceeding shall exist.
* NB Repealed July 1, 2005

* S 1420. Receiver. 1. Where the mortgage provides that the mortgagee
is entitled to the appointment of a receiver for the mortgaged property,
the mortgagee shall have the right at any time after the filing of the
notice of pendency pursuant to section fourteen hundred three of this
article to make an application under the index number assigned to the
non-judicial proceeding, in the supreme court in the county in which the
sale takes place, for the appointment of a receiver.
2. Where the mortgage provides that a receiver may be appointed
without notice or contains the covenant set forth in subdivision ten of
section two hundred fifty-four of the real property law, notice of an
application for such appointment shall not be required and the receiver
shall be appointed by the court pursuant to an order submitted by the
mortgagee simultaneously with, or at any time after, the filing of the
application therefor.
3. Where a receiver has been appointed, upon the application of the
mortgagee, the court may direct that the receiver of the rents apply the
rents received by the receiver towards the payment of accrued interest
on the mortgage, provided due provision shall have been made for the
payment of taxes and ordinary and necessary expenses for the operation,
repair and maintenance of the mortgaged property and such other expenses
as the court may direct. Any moneys so paid over by the receiver shall
be deducted from the amount due on the mortgage, or the note, bond or
obligation secured thereby, and the mortgagee`s affidavit of the
indebtedness filed with the report of sale pursuant to section fourteen
hundred fourteen of this article shall so state the amounts thereof.
4. In a city with a population of one million or more persons, an
order appointing a receiver to receive the rents and profits of a
multiple dwelling shall provide that the receiver:
(a) register with any municipal department as provided by applicable
law; and
(b) expend rents and income and profits as described in subdivision
three of this section, except that a priority shall be given to the
correction of immediately hazardous and hazardous violations of housing
maintenance laws within the time set by orders of any municipal
department, or, if not feasible, seek a postponement of the time for
compliance.
5. The receiver shall be entitled to such commissions, not exceeding
five percent of the greater of (a) the sums received by the receiver or
(b) the sums disbursed by the receiver, as the court by which the
receiver is appointed allows.
* NB Repealed July 1, 2005

* S 1421. Right to seek judicial intervention; mortgagee`s liability
for failure to comply with this article. 1. If the mortgagee commences
proceedings under this article to foreclose a mortgage, or extension,
amendment, modification or consolidation thereof, executed prior to the
effective date of this article, the mortgagor may by written notice to
the mortgagee require that further foreclosure proceedings be conducted
judicially as provided in article thirteen of this chapter. Such notice
must be delivered to the mortgagee by registered or certified mail, or
such other method as may be specified in the mortgage, postmarked not
later than forty days after the date the mortgagor receives the notice
of intention to foreclose as provided in this article, and shall state
(a) the date on which the mortgage, or extension, amendment,
modification or consolidation thereof, that the mortgagee seeks to
foreclose was executed, and (b) that the mortgagor is exercising its
right under this section to require that the foreclosure of the mortgage
be conducted through the judicial process.
2. If the mortgagee commences proceedings under this article to
foreclose a mortgage, or extension, amendment, modification or
consolidation thereof, executed after the effective date of this
article, the mortgagor, not later than forty days after the date it
receives the notice of intention to foreclose as provided in this
article, may apply, by order to show cause, to the supreme court in the
county in which the mortgaged property is located for an order directing
that further proceedings be conducted pursuant to article thirteen of
this chapter, and for a temporary restraining order staying further
proceedings under this article pending a hearing of the application. The
application shall include one or more affidavits (a) stating whether a
previous application for the same or similar relief has been made, and
if so the outcome thereof, and (b) stating facts to support one or more
of the following allegations:
(1) that the mortgage, or extension, amendment, modification or
consolidation thereof, sought to be foreclosed does not contain a
provision permitting the foreclosure thereof by power of sale or other
non-judicial means;
(2) that the obligation secured by the mortgage is invalid or not
otherwise due;
(3) that the mortgagor is not in default under the mortgage or
otherwise has a meritorious defense to the foreclosure thereof;
(4) that the mortgagee has not complied with the terms and conditions
of this article; or
(5) that under the facts and circumstances, allowing the foreclosure
to proceed under this article would cause an undue hardship to the
mortgagor.
3. If the application is granted, the foreclosure shall, unless the
court subsequently orders otherwise, proceed pursuant to article
thirteen of this chapter for the judicial foreclosure of the mortgage.
4. If the application is denied, the sale may proceed pursuant to this
article.
5. At any time the mortgagee may, without prejudice, voluntarily
discontinue proceedings under this article and pursue such rights and
remedies as may be available to it under article thirteen of this
chapter.
6. After receiving the notice of intention to foreclose, an interested
party other than the mortgagor may petition the court for relief only
pursuant to the provisions of article sixty-three of the civil practice
law and rules. The court shall apply the standards for preliminary
injunctive relief and shall consider whether granting the relief
requested will prejudice the substantial rights of any party or unduly
delay the adjudication of such rights.
7. Any person entitled to receive notice of the intention to foreclose
or notice of sale under this article may recover from the mortgagee any
damages caused by the failure of the mortgagee to comply with the
procedures and conditions set forth in this article.
* NB Repealed July 1, 2005