Hundreds of thousands of New York households have fallen behind on their mortgages or property taxes during the pandemic, putting them at risk of losing their homes after statewide foreclosure protections expired earlier this month. So what exactly should homeowners do? City Limits talked with three experts for guidance.

Adi Talwar

Homes on Tomlinson Avenue in Morris Park, The Bronx.


Hundreds of thousands of New York households have fallen behind on their mortgages or property taxes during the pandemic, putting them at risk of losing their homes after statewide foreclosure protections expired earlier this month. 

A disproportionate number of those households are Black, Latino or Asian, potentially triggering a loss of equity in communities of color that outpaces even the 2009 financial crisis, experts say.

“We are seeing mortgage distress rates that are really alarming and dwarf the numbers we saw during the Recession,” said Jacob Inwald, the director of foreclosure prevention at Legal Services NYC.

Inwald cited data compiled by the U.S. Census Bureau’s twice-monthly Household Pulse Survey, which found that nearly 11 percent of New York homeowners—more than 400,000 households—were in delinquency or default between July and October. That rate was nearly 20 percent for homeowners of color, according to the federal data. In a letter to Gov. Kathy Hochul last month, a group of more than 50 legal service providers and advocates asked for additional funding to combat what they termed a “civil rights and economic justice crisis, not merely a housing crisis.”

The most recent Pulse Survey, with data current as of Jan. 11, finds that more than 250,000 homeowners are now behind on their mortgages. Another 127,000 households have “no confidence” that they will be able to make next month’s payment, while more than 402,000 homeowners have only “slight confidence,” the survey found.

The numbers are grim, but just because a homeowner has fallen behind on their mortgage does not mean they will immediately lose their property, Inwald and other housing experts said.

New York provides several opportunities for free legal assistance to forestall or prevent foreclosure, as well as relatively strong homeowner protections established by the state in the wake of the 2009 foreclosure crisis. There are also some cash grants provided by New York’s new Homeowner Assistance Fund, which allocates money on a first-come, first-served basis for qualifying low- and middle-income applicants.

In addition, New Yorkers have the benefit of a lengthy foreclosure process with a mandatory settlement conference phase, which can allow owners represented by an attorney to negotiate new conditions with their mortgage lender.

“There is hope for homeowners because there are different loan modifications that lenders can do,” said Kirsten Keefe, a senior staff attorney with the Consumer Finance and Housing Unit of the Empire Justice Center. “And we have good regulations in New York state.”

So what exactly should homeowners do if they are facing foreclosure? City Limits talked with three experts for guidance. 

Seek free legal assistance 

First off, New York state funds a network of nonprofit providers that offer free homeowner counseling and legal assistance to households at risk of losing their properties. A total of 89 agencies in every county of the state receive funding from the attorney general’s Homeowner Protection Program (HOPP) to provide these free services.

Homeowners behind on their mortgages should immediately seek free, credible counseling and, ultimately, legal assistance from HOPP providers if they get a foreclosure notice from their lender, Inwald said. In New York City, that can be as easy as calling 311 and asking to connect with HOPP. Homeowners can also call 1-855-HOME-456. 

At the same time, New Yorkers should watch out for phony legal advice or speculators targeting people in danger of foreclosure, he added. 

“Don’t start working with someone who rings your doorbell or gives you a call,” Inwald said. “Reach out and get free trusted help and be alert that scammers are preying on them, reviewing filings and getting their information and knocking on their doors.”

Unlike many states, New York has established a judicial foreclosure process, which means lenders have to sue to take someone’s home away when they fall behind on their mortgage. It’s a lengthy process that involves an initial 90-day foreclosure notice, followed by a settlement conference within 60 days. That gives property owners some breathing room to connect with a housing counselor and work with lenders to reach an agreement that saves their home.

“I am afraid of the filings that are going to come, but the positive thing with foreclosures is we have time in the process,” Keefe said. “We’re looking at five months down the road, and that’s just the beginning.” 

Still, the state will likely see tens of thousands of foreclosure filings in the coming months. Homeowners with representation have a significantly better chance of staving off foreclosure than those who go to court without a lawyer. That’s where the HOPP attorneys come in. 

The network is typically funded with $20 million annually—the same allocation included in Gov. Kathy Hochul’s recently-released executive budget. HOPP providers say they need at least $35 million in the coming fiscal year, followed by $40 million in each of the next two years to meet the demand for foreclosure prevention assistance. Hochul did not earmark the extra cash, so advocates have turned their demands to the legislature to up the total.

“New York state has a great network of housing counselors and legal service lawyers who are very well trained and offer free assistance to homeowners,” Keefe said. “But every year we need to sing for our supper.” 

Apply for state funding for low-income homeowners

New York’s new $539 million Homeowner Assistance Fund (HAF) opened Jan. 3 and the relief program, administered by New York State Homes and Community Renewal (HCR), will at some point begin sending checks to low- and middle-income households who owe mortgage payments, property taxes and other housing costs.

The state fund will provide a maximum of $50,000 on a first-come, first-served basis to qualifying households who earn no more than 100 percent of the Area Median Income ($83,600 for an individual and $119,300 for a family of four in New York City). The money can cover mortgage payments, property taxes and water or sewage bills as well as unpaid maintenance fees for co-op or condo owners.

Applicants must prove their experienced financial hardship as a result of the pandemic, and that they can continue to make payments after receiving their HAF check. In most cases, households must be at least 30 days behind on housing payments, but unemployed homeowners can also seek up to six months of future payments even if they are current on their payments. 

So far, 22,400 households have applied for HAF money, HCR said. The agency expects to receive more applications than it has money to distribute, but has not yet determined a closing date. Thus, said Queens Volunteer Lawyers Project (QVLP) Executive Director Mark Weliky, speed and accuracy will make the difference between who gets funding from the program and who is locked out.

Applicants who seek support from nonprofits like his, where staff are trained to navigate the HAF program, will have a leg up, Weliky said. 

But so far, relatively few applicants have sought that assistance, he said. HCR presented data to QVLP and other providers showing that the vast majority of applicants submitted forms without the help of nonprofit groups. He encouraged prospective applicants to refer to the “Get Local Support” tab on the HAF website to find nearby groups.

He also said he hopes the state will provide feedback to those applying about whether their applications were submitted correctly. 

At the same time, he said the households could use even more money from the state than is currently allocated. 

“Homeowners in Queens owe a lot, especially in lower income communities of color,” he said. “A lot of people lost their jobs, or had family members who passed during COVID and I think there is a serious need in Queens that won’t be met by HAF.”

Avoid NYC’s property tax lien sale

New York City throws a unique obstacle in the path of homeowners who have fallen behind on their property taxes—a controversial lien sale that auctions their debts to private collectors for pennies on the dollar. The program, started by Mayor Rudolph Guiliani as a means of enforcing property tax collection, has been criticized as putting some of the city’s most vulnerable homeowners at risk of displacement. 

Nearly half of the 5,300 one- to three-family homes (known as Class 1 properties) on the city’s lien-sale list in 2020* were located in just 10 council districts. Predominantly Black and Latino Council District 37, which covers East New York and Bushwick, accounted for 300 of the properties, while three Council districts in predominantly Black Southeast Queens all had about 300 potential tax lien sales. The sale was postponed that year but took place again in December 2021.

“The city is participating in stripping equity from low- and moderate-income communities, communities of color, mostly seniors, for a nominal amount of money,” Inwald said. “Homes are lost to foreclosure and that causes displacement in neighborhoods where a lot of investors are looking to buy.” 

Homeowners who owe back taxes can also contact HOPP lawyers to help them work out a payment plan before their liens go on the auction block, but the process of connecting with the Department of Finance can be a significant challenge, said Weliky, of QVLP.

Their best bet may be applying for assistance from HAF to cover unpaid taxes and prevent an investor from foreclosing on the property because of a relatively modest amount of money.

“We’ve had people, they’re 85 years old, and they’re facing foreclosure and it’s because of $12,000 in property taxes,” Weliky said. “Most people in that situation have lost their house.” 

Weliky said the city should permanently end the lien sale program—a proposal that Mayor Eric Adams has said he supports

“During COVID, to me, that’s crazy that they have started doing that again,” Weliky added. “That’s just sick.”

Ripple effect: Staving off dual housing crises 

Protecting homeowners could also have a major impact on renters, particularly in small owner-occupied buildings with a handful of units. 

Those kinds of properties often provide “naturally occurring affordable housing” that would disappear if investors and private equity firms snatch up foreclosed homes and redevelop or flip them to wealthier buyers, Inwald said. That has been the case throughout much of New York City, with East New York among the starkest examples, as City Limits reported earlier this month. 

Investors are likely to drive tenants out of their buildings to make them more attractive to new buyers or to rent the units at a higher price. State housing law offers little protection for tenants in buildings with fewer than six units. 

Jamaica resident Carol Thompson and her husband, a double amputee military veteran, are among the tenants facing eviction from homes currently in foreclosure.“I would be out on the street as it stands right now,” Thompson said in September 2020. “We would be homeless. I have no one I could go and live with. I would be afraid to live in the shelter.”

Sixteen months later, Thompson, 63, has managed to stay in the home her aunt owned throughout the pandemic thanks to eviction and foreclosure freezes. 

She and her husband are now looking to rent in a senior housing complex, or buy a co-op or condo they could afford on their municipal pensions—she was a head cook in a Queens public school; he was a janitor for Queens Public Library.

“It’s hard to find places we could afford,” she said. “I just hope and pray something will come up.” 

*Editor’s Note: A previous version of this story misstated the tax lien sale year. The 5,300 properties described here were included in the list of properties eligible for auction in 2020, not 2021.

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