New York — Financing — New York Real Estate — State Law Practice Test
6 questions in this topic · 6 drawn at random this round
After a New York judicial foreclosure sale is completed, what has happened to the defaulting borrower's equity of redemption?
Session Progress
This New York Real Estate — State Law New York — Financing practice set has 6 practice questions based on the official exam materials, each with an instant explanation.
Sample questions
Three questions from the New York — Financing bank with the correct answer and an explanation. The practice quiz above draws 6 questions at random from the same bank.
New York follows which theory of mortgages, which determines who holds title to the property during the loan term?
- Lien theory — the borrower keeps title and the lender holds only a lien — Correct answer
- Title theory — the lender holds legal title until the debt is paid
- Intermediary theory — title automatically shifts to the lender on default
- Equitable theory — a trustee holds title for both parties
Explanation: New York is a LIEN-THEORY state: the borrower (mortgagor) keeps legal title and possession, and the lender (mortgagee) holds only a lien against the property as security. The lender does NOT take title; this is why a NY lender must foreclose judicially to enforce the lien rather than simply taking back title. English term — Lien theory（留置权理论）: the borrower keeps title and the lender holds only a lien. NY source: NY mortgage law / RPAPL Art.13 (judicial foreclosure).
Handbook: New York Financing — Lien theory (NY mortgage law / RPAPL Art.13)
How are mortgages foreclosed in New York when a borrower defaults?
- Judicially — through a court lawsuit ending in a judgment of foreclosure and sale — Correct answer
- Non-judicially, using a power-of-sale clause without any court action
- By the lender taking title back automatically (strict foreclosure only)
- By the Department of State ordering a sale administratively
Explanation: Because New York is a lien-theory state, foreclosure is JUDICIAL — the lender must file a lawsuit and obtain a court judgment of foreclosure and sale; there is no power-of-sale (non-judicial) foreclosure for ordinary residential mortgages. This makes NY foreclosure slower and court-supervised. English term — Judicial foreclosure（司法止赎）: foreclosure carried out through a court action. NY source: RPAPL Article 13.
Handbook: New York Financing — Judicial foreclosure (RPAPL Art.13)
Before starting a foreclosure action on an owner-occupied home loan in New York, what must the lender or servicer send the borrower under RPAPL §1304?
- A 90-day pre-foreclosure notice listing housing counselors — Correct answer
- A 3-day notice to quit the premises
- A 30-day demand letter only, with no counseling information
- A notice of default recorded with the county clerk in lieu of mailing
Explanation: RPAPL §1304 requires a 90-day pre-foreclosure notice mailed (certified/registered + first-class) to the borrower at least 90 days before the lender commences a foreclosure action on a home loan; it must list HUD-approved housing counselors and warn of default. NY also requires a mandatory settlement (foreclosure) conference under CPLR §3408. English term — 90-day pre-foreclosure notice（90天止赎前通知）: statutory warning before suit. NY source: RPAPL §1304.
Handbook: New York Financing — RPAPL §1304 90-day pre-foreclosure notice