Skip to content
ClosingCodeClosingCode
ENES

New York · ForeclosureNew York deficiency judgment after foreclosure: the 90-day motion and the fair market value credit

New York foreclosures go through the courts, and what a borrower can owe after the sale is set by RPAPL §1371. If a person liable for the mortgage debt is made a defendant and has appeared or was personally served with the summons, the final judgment may award payment by that person of all or part of the debt that remains after the sale and the application of the proceeds. The party owed the residue must move for leave to enter a deficiency judgment together with the motion to confirm the sale, and that motion must be made within ninety days after the sale is consummated by delivery of the deed to the purchaser; notice is served personally or as the court directs. The court then determines the fair and reasonable market value of the property as of the auction date, and the deficiency judgment equals the amount owed under the judgment with interest, plus prior liens and encumbrances with interest, plus costs and the referee's fees, less the market value or the sale price, whichever is higher. If no motion is made as the statute prescribes, the sale proceeds, whatever the amount, are deemed full satisfaction of the mortgage debt and no deficiency can be recovered in any action. Rents held by a receiver or a mortgagee in possession still go to the plaintiff up to the shortfall between the judgment and the sale price (RPAPL §1371).

What the statute sets

  1. Who (§1371(1))

    A liable defendant who appeared or was personally served with the summons.

  2. Deadline (§1371(2))

    Motion with the motion to confirm, within 90 days after the deed is delivered.

  3. Formula (§1371(2))

    Debt, prior liens and costs, less the higher of fair market value or the sale price.

  4. No motion (§1371(3))

    The sale proceeds are full satisfaction; no deficiency in any action.

What the TC does on a New York short sale or a sale after foreclosure

  • On a short sale, get the lender's approval letter and note whether it waives any deficiency.
  • On a purchase of foreclosed property, track the referee's deed and the order confirming the sale.
  • Keep the deficiency question with the seller's attorney – it is not part of the buyer's closing.

Questions about New York deficiency judgments

How long does a New York lender have to seek a deficiency judgment?

Ninety days after the foreclosure sale is consummated by delivery of the deed, with the motion to confirm the sale (RPAPL §1371(2)).

What happens if the lender doesn't move for a deficiency in New York?

The sale proceeds, whatever the amount, are deemed full satisfaction of the mortgage debt and no deficiency can be recovered (RPAPL §1371(3)).

Related guides

Track a short sale approval letter and any lender conditions as tasks on the deal in ClosingCode.

Start free trial

Source: RPAPL §1371 (nysenate.gov), read October 30, 2026.

General information, not legal advice. ClosingCode is software; it is not a law firm or brokerage. This guide is not a substitute for the advice or services of an attorney.