Q: The county took possession of my 40-acre parcel for non-payment of property taxes that my mortgage co. failed to pay.
I have a mortgage on property that includes parcels in two towns in upstate NY. The mortgage servicing was recently transferred to a new company and they paid the taxes on one parcel but failed to pay on the second. The county has taken sealed bids and is scheduled to approve the sale at their meeting next week. How can I stop the sale and reclaim my property? What recourse do I have against the mortgage company for their failure to perform?
A:
New York Real Property Tax Law (RPTL) Sections 1110 and 1111 allow you a “right of redemption”, which requires you to pay all back taxes and penalties on the property, usually within 2 years of the lien, to stop a lien foreclosure sale.
If the county has already filed a petition to foreclose on the lien, you must file your answer to the petition before the deadline on the petition or risk a judgment of foreclosure being granted by the court on default pursuant to RPTL Section 1123.
Federal law provides that the mortgage servicer should reimburse any charges and penalties stemming from its failure to pay taxes from the funds it collected into its tax escrow account, but this depends on the stage of the proceedings. Your attorney should draft a “notice of error” and send it to the servicer ASAP to exercise this right, if applicable. See 12 C.F.R. § 1024.35.
You should promptly retain a local real estate litigation attorney to file your answer to the foreclosure petition. This is a highly time sensitive matter and not all defaults can be cured.
Jack Mevorach agrees with this answer
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