St. Albans Foreclosure Lawyer: Your Deadlines, the Jamaica Court, and Your Options

Long Island homeowners deal with a county that collects delinquent taxes slowly; St. Albans homeowners deal with a city that sells the debt. Each year the Department of Finance publishes a lien sale list, mails warning notices at 90, 60, 30 and 10 days, and then sells the eligible liens to a trust created for the purpose. From that point the homeowner owes the trust's servicer, not the city, the balance accrues interest at a rate set by statute that has run 9 percent or higher compounded daily, and the servicer may commence a tax lien foreclosure in Queens County Supreme Court under the Administrative Code. A tax lien foreclosure has no CPLR 3408 conference and no RPAPL 1304 notice; it is a faster, harsher process than a mortgage foreclosure.

The interaction with the mortgage case is the trap. A St. Albans homeowner behind on the mortgage usually stops paying property taxes too, since the servicer had been paying them from escrow. The mortgage servicer, seeing the lien sale coming, advances the taxes to protect its own lien and adds them to the loan with interest, or lets the lien sell and deals with the trust later. Either way the homeowner's arrears grow from a source that has nothing to do with the mortgage payment. Managing the two clocks together is the job: getting the property off the lien sale list, disputing improper servicer advances before the RPAPL 1321 referee, and making sure any modification or sale accounts for the city as well as the bank.

The lien sale is avoidable for almost every owner-occupant who acts before the sale date, and most St. Albans homeowners who end up in it never opened the warning letters. The Department of Finance offers installment agreements that remove the property from the list on signing, and a homeowner in hardship can obtain a long-term plan with a small or no down payment; missing payments under an agreement puts the property back on the next list. Homeowners who receive the senior citizen homeowners' exemption, the disabled homeowners' exemption or certain veteran exemptions are excluded from the sale on filing the exclusion form, and a low-income homeowner exclusion has been available in recent years. Water charges are disputed with the Department of Environmental Protection, and a leak or a meter error can account for thousands.

Where the lien has already been sold, the trust's servicer must be dealt with directly: it will provide a payoff, will accept installment arrangements in some cases, and must comply with the Administrative Code's notice requirements before foreclosing. I fold the tax lien into the mortgage defense strategy from the first meeting. A modification at the Sutphin Boulevard conference part can capitalize servicer advances for taxes and set up a proper escrow going forward; a sale pays the lien at closing along with the mortgage; and a servicer that advanced taxes late, with penalties, or for years already resolved, has an arrears figure that shrinks when the referee examines it. The city is a second creditor in nearly every St. Albans foreclosure, and it has to be managed as one.

The Sutphin Boulevard courthouse in Jamaica hears both of the cases a St. Albans homeowner may face, but it treats them differently, and homeowners need to understand which one they are in. A mortgage foreclosure on an owner-occupied home goes to the foreclosure settlement conference part, where a court attorney referee supervises negotiation, free counselors are available, and the servicer's good faith is recorded. A tax lien foreclosure by the trust's servicer skips the conference part entirely and moves on a motion calendar. I have practiced foreclosure defense for 27 years, and the difference in pace between those two tracks is something I explain at every first meeting in Southeast Queens.

In the mortgage case, the referees in the conference part are familiar with servicer tax advances and will direct a servicer to itemize them, and the assigned justices decide the ordinary defenses, standing, RPAPL 1304, CPLR 213(4) and the amount, along with any objection to the referee's computation. Queens justices have tolled interest and denied fees for servicer bad faith and have dismissed time-barred Southeast Queens loans. A contested mortgage case runs two to four years from the summons to an auction; an unanswered one about a year. A tax lien foreclosure can move faster than either, which is why the lien sale list, not the courthouse, is where a St. Albans homeowner's tax problem should be solved.

The Second Department, which reviews Jamaica decisions, demands strict compliance with RPAPL 1304 and requires the St. Albans plaintiff to prove the mailing by a witness with personal knowledge or of a routine the witness actually follows. St. Albans loans from the 2000s changed servicers repeatedly, and the current servicer frequently cannot produce anyone who can testify to a predecessor's mailing. Notices to two borrowers in one envelope, notices with added collection language, notices with a counselor list for another county, and form mailing affidavits have all been held insufficient, and a notice whose cure figure includes improper tax advances is itself open to challenge.

Under RPAPL 1306 the notice must be filed electronically with the Department of Financial Services within three business days of mailing, and the St. Albans plaintiff must prove it with the confirmation. Where either statute fails, the St. Albans mortgage case is dismissed without prejudice and the lender must restart. On a loan first accelerated in an earlier action that was abandoned, the restart may not fit inside the six years CPLR 213(4) allows, and the Foreclosure Abuse Prevention Act, effective December 30, 2022, prevents the lender from claiming the acceleration was revoked; time-barred St. Albans mortgages can be cancelled under RPAPL 1501(4). The tax lien, if one has been sold, survives all of that and must be addressed on its own terms.

A St. Albans homeowner can be served with two summonses months apart, one from the mortgage servicer's counsel and one from the tax lien trust's counsel, and each requires its own answer on its own deadline. Defaulting on either is costly. In the mortgage case, the default eliminates every defense and converts a two to four year case into a one-year path to auction. In the tax lien case, the default allows the trust to move directly toward a judgment and sale with no settlement conference to slow it.

The mortgage answer must raise standing first or it is waived, plead the statute of limitations as an affirmative defense, assert the RPAPL 1304 and 1306 conditions precedent, and specifically deny the amount claimed, including every tax and water advance the servicer added. The tax lien answer challenges the trust's compliance with the Administrative Code's pre-foreclosure notice requirements, the accuracy of the charges, and the interest computation, and asserts any exemption that should have kept the property off the sale list. Nothing said to the servicer, the Department of Finance or the trust's servicer extends either deadline; a written stipulation from the relevant plaintiff's attorney does, and I obtain them while the tax records are gathered.

The St. Albans household that wants to stay needs both creditors handled in one plan. The mortgage modification through the Sutphin Boulevard conference part should capitalize any legitimate servicer tax advances and establish an escrow so the city is paid going forward; a Department of Finance payment agreement covers any unsold delinquency; and a lien already sold is paid off, negotiated with the trust's servicer, or, where the property qualified for an exclusion that was never applied, challenged. A completed modification ends the mortgage case, and a current payment agreement keeps the property off future lien sale lists.

The household that is leaving sells while the mortgage case is pending, with the mortgage, the tax lien and any water charges paid at closing and the equity kept; St. Albans values support that outcome for most owners, and the notice of pendency does not prevent the sale. The auction at the courthouse is the result to avoid: a discounted price, default interest and fees off the top, tax liens paid ahead of any surplus, and the remainder held until an RPAPL 1361 claim is filed. On the rare underwater St. Albans loan, a short sale requires the lender's consent and a written waiver of any deficiency under RPAPL 1371, and the tax lien still has to be satisfied from the proceeds. Two creditors, one house, one plan.