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NEW YORK STATE
REAL PROPERTY ACTIONS AND PROCEEDINGS LAW
(RPAPL)

ARTICLE 13

ACTION TO FORECLOSE A MORTGAGE

Section   1301.     Separate action for mortgage debt.

          1311.     Necessary defendants.

          1312.     Representative defendants.

          1313.     Permissible defendants.

          1315.     Action by owner of junior
                    participating interest.

          1321.     Default or admission.

          1325.     Receiver.

          1331.     Notice of pendency.

          1341.     Payment into court of amount due.

          1351.     Judgment of sale.

          1352.     Judgment foreclosing right of redemption.

          1353.     Conveyance.

          1354.     Distribution of proceeds of sale.

          1355.     Report of sale; confirmation.

          1361.     Application for surplus; reference.

          1362.     Payment of surplus out of court.

          1371.     Deficiency judgment.

          1391.     Proceeding for share of unknown heirs.

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Sec. 1301.     SEPARATE ACTION FOR MORTGAGE DEBT.

1.   Where final judgment for the plaintiff has been rendered in
     an action to recover any part of the mortgage debt, an
     action shall not be commenced or maintained to foreclose the
     mortgage, unless an execution against the property of the
     defendant has been issued upon the judgment to the sheriff
     of the county where he resides, if he resides within the
     state, or if he resides without the state, to the sheriff of
     the county where the judgment-roll is filed; and has been
     returned wholly or partly unsatisfied.

2.   The complaint shall state whether any other action has been
     brought to recover any part of the mortgage debt, and, if
     so, whether any part has been collected.

3.   While the action is pending or after final judgment for the
     plaintiff therein, no other action shall be commenced or
     maintained to recover any part of the mortgage debt, without
     leave of the court in which the former action was brought.


Sec. 1311.     NECESSARY DEFENDANTS.

Each of the following persons, whose interest is claimed to be
subject and subordinate to the plaintiff's lien, shall be made a
party defendant to the action:

1.   Every person having an estate or interest in possession, or
     otherwise, in the property as tenant in fee, for life, by
     the curtesy, or for years, and every person entitled to the
     reversion, remainder, or inheritance of the real property,
     or of any interest therein or undivided share thereof, after
     the determination of a particular estate therein.

2.   Every person having a right of dower or an inchoate right of
     dower in the real property or any part or share thereof.

3.   Every person having any lien or incumbrance upon the real
     property which is claimed to be subject and subordinate to
     the lien of the plaintiff.

4.   Where the mortgage is upon any of the public utilities
     regulated by the public service law, the public service
     commission.


Sec. 1312.     REPRESENTATIVE DEFENDANTS.

1.   Where a trust has been created by will or by deed or by
     declaration of trust, the trustees of such trust who shall
     have duly qualified shall be made parties defendant and
     shall represent all persons who are or may become entitled
     to a beneficial interest in the property or an undivided
     share thereof or in the proceeds of sale thereof under and
     by virtue of said trust and all remaindermen who are or may
     become entitled to the reversion, remainder or inheritance
     of the property or the proceeds of sale thereof either
     before or after the termination of said trust, without
     naming such beneficiaries or remaindermen as parties
     defendant. Service of the summons and complaint upon any one
     of such duly qualified trustees shall be sufficient service
     upon the trust estate and upon all persons who are or may
     become entitled to a beneficial interest in the property or
     an undivided share thereof or in the proceeds of sale
     thereof and all remaindermen who are or may become entitled
     to the reversion, remainder or inheritance of the property
     or the proceeds of sale thereof either before or after the
     termination of said trust.

2.   Whenever the duly qualified executors under a will are made
     parties defendant they shall represent all of the legatees
     named in the will and the successors and assigns of such
     legatees, irrespective of whether or not such legacies are a
     charge upon the real property, and such legatees, their
     successors and assigns need not be named as parties
     defendant. Service of the summons and complaint upon any one
     of such duly qualified executors shall be sufficient service
     upon the executors under said will and upon all legatees
     named in said will, their successors and assigns,
     irrespective of whether or not such legacies are a charge
     upon the real property.


Sec. 1313.     PERMISSIBLE DEFENDANTS.

Any person who is liable to the plaintiff for payment of the debt
secured by the mortgage may be made a defendant in the action.
The state may be made a party defendant to an action for the
foreclosure of a mortgage on real property, where it has an
interest in or a lien on the property subsequent to the lien of
the mortgage sought to be foreclosed in said action, in the same
manner as a private person.


Sec. 1315.     ACTION BY OWNER OF JUNIOR PARTICIPATING INTEREST.

An action may be maintained by the owner of a junior
participating share or interest in a bond or note secured by a
mortgage on real, or on real and personal property, for the
payment of principal and interest and for foreclosure of such
bond or note and mortgage in its entirety, or in the alternative,
subject to the interest of the owner of the senior share,
notwithstanding that the entire mortgage debt may be due and
payable according to its terms, in the event that the owner of
the senior share, to whom is given the right in the participating
agreement to enforce such bond or note and mortgage shall fail or
refuse to commence an action for the enforcement of such bond or
note and mortgage in any manner permitted thereby, after ten
days' written notice and demand to commence any such action,
following default in the performance of any of the terms and
covenants of such bond or note and mortgage. Upon such failure or
refusal, such junior participant may exercise any and all options
and remedies provided in such bond or note and mortgage or
otherwise available to any holder thereof.


Sec. 1321.     DEFAULT OR ADMISSION.

1.   If the defendant fails to answer within the time allowed or
     the right of the plaintiff is admitted by the answer, upon
     motion of the plaintiff, the court shall ascertain and
     determine the amount due, or direct a referee to compute the
     amount due to the plaintiff and to such of the defendants as
     are prior incumbrancers of the mortgaged premises, and to
     examine and report whether the mortgaged premises can be
     sold in parcels and, if the whole amount secured by the
     mortgage has not become due, to report the amount thereafter
     to become due. Where the defendant is an infant, and has put
     in a general answer by his guardian, or if any of the
     defendants be absentees, the order of reference also shall
     direct the referee to take proof of the facts and
     circumstances stated in the complaint and to examine the
     plaintiff or his agent, on oath, as to any payments which
     have been made.

2.   When he moves for judgment, the plaintiff shall show whether
     any of the defendants who have not appeared are absentees.


Sec. 1325.     RECEIVER.

1.   Where the action is for the foreclosure of a mortgage
     providing that a receiver may be appointed without notice,
     notice of a motion for such appointment shall not be
     required.

2.   Where a receiver has been appointed, upon the application of
     the plaintiff or of any holder of a certificate evidencing
     an undivided interest in the mortgage or mortgage debt and
     upon proof that no answer has been interposed affecting the
     validity of the mortgage or the amount due thereon, or
     asserting any prior lien, or asserting a plea of tender of
     payment of the amount due, or which if sustained would
     affect in any way the right of the plaintiff to a judgment
     in foreclosure and to the payment of the amount claimed by
     the plaintiff in his complaint to be due, the court may
     direct that the receiver of the rents appointed in such
     action apply, during the pendency of the action, the rents
     received by him towards the payment of accrued interest on
     the mortgage, provided due provision shall have been made
     for the payment of taxes, administration expenses, fees and
     charges and such reserve as the court may direct. Any monies
     so paid over by the receiver shall be deducted from the
     amount of the judgment in said action.

3.   In a city with a population of one million or more persons
     an order appointing a receiver to receive the rents and
     profits of a multiple dwelling shall provide that the
     receiver:

     (a)  register with any municipal department as provided by
          applicable law; and

     (b)  expend rents and income and profits as described in
          subdivision two of this section, except that a priority
          shall be given to the correction of immediately
          hazardous and hazardous violations of housing
          maintenance laws within the time set by orders of any
          municipal department, or, if not practicable, seek a
          postponement of the time for compliance.


Sec. 1331.     NOTICE OF PENDENCY.

The plaintiff, at least twenty days before a final judgment
directing a sale is rendered, shall file in the clerk's office of
each county where the mortgaged property is situated a notice of
the pendency of the action, which shall specify, in addition to
other particulars required by law, the date of the mortgage, the
parties thereto and the time and place of recording.


Sec. 1341.     PAYMENT INTO COURT OF AMOUNT DUE.

Where an action is brought to foreclose a mortgage upon real
property upon which any part of the principal or interest is due,
and another portion of either is to become due, and the defendant
pays into court the amount due for principal and interest and the
costs of the action, together with the expenses of the
proceedings to sell, if any, the court shall:

1.   Dismiss the complaint without costs against plaintiff, if
     the payment is made before judgment directing sale; or

2.   Stay all proceedings upon judgment, if the payment is made
     after judgment directing sale and before sale; but, upon a
     subsequent default in the payment of principal or interest,
     the court may make an order directing the enforcement of the
     judgment for the purpose of collecting the sum then due.


Sec. 1351.     JUDGMENT OF SALE.

1.   The judgment shall direct that the mortgaged premises, or so
     much thereof as may be sufficient to discharge the mortgage
     debt, the expenses of the sale and the costs of the action,
     and which may be sold separately without material injury to
     the parties interested, be sold by or under the direction of
     the sheriff of the county, or a referee.

2.   Where the mortgage debt is not all due, and the mortgaged
     property is so circumstanced that it can be sold in parcels
     without injury to the interests of the parties, the final
     judgment shall direct that no more of the property be sold
     in the first place than is sufficient to satisfy the sum
     then due, with the costs of the action and expenses of the
     sale. Upon a subsequent default in the payment of principal
     or interest the plaintiff may apply for an order directing
     the sale of the residue, or of so much thereof as is
     necessary to satisfy the amount then due, with the costs of
     the application and the expenses of the sale. The plaintiff
     may apply for and obtain such an order as often as a default
     happens. If it appears that the mortgaged property is so
     circumstanced that a sale of the whole will be most
     beneficial to the parties, the final judgment may direct
     that the whole property be sold discharged from the entire
     mortgage debt and that the proceeds of the sale, after
     deducting the costs of the action and the expenses of the
     sale, be either applied to the satisfaction of the whole sum
     secured by the mortgage, with such a rebate of interest as
     justice requires; or be first applied to the payment of the
     sum due, and the balance, or so much thereof as is
     necessary, be invested at interest for the benefit of the
     plaintiff, to be paid to him from time to time as any part
     of the principal or interest becomes due, or may, at the
     option of the mortgagee, direct that the whole property be
     sold to satisfy the debt then due with the costs of the
     action and expenses of the sale, subject to the continuing
     lien of the mortgage for the amount of the debt not then due
     and unpaid according to its terms. The provisions of this
     section shall not limit or affect the plaintiff's right to
     judgment and sale in an action specified in section 1315.

3.   If it appears to the satisfaction of the court that there
     exists no more than one other mortgage on the premises which
     is then due and which is subordinate only to the plaintiff's
     mortgage but is entitled to priority over all other liens
     and encumbrances except those described in subdivision 2 of
     section 1354, upon motion of the holder of such mortgage
     made without valid objection of any other party, the final
     judgment may direct payment of the subordinate mortgage debt
     from the proceeds in accordance with subdivision 3 of
     section 1354.


Sec. 1352.     JUDGMENT FORECLOSING RIGHT OF REDEMPTION.

Where real property has been sold pursuant to a judgment in an
action to foreclose a mortgage, and an action is thereafter
brought to foreclose or extinguish a right of redemption in such
real property, the judgment, instead of directing a sale of the
property, shall fix the right of any person having a right of
redemption therein or the right to foreclose a subordinate
mortgage or other lien and shall provide that a failure to redeem
or commence an action for the foreclosure of such mortgage or
other lien within such time shall preclude such person having a
right of redemption or the holder of such mortgage or other lien
from redeeming such property or foreclosing such mortgage or
other lien, and thereafter such person having a right of
redemption or the holder of such mortgage or other lien shall be
excluded from claiming any title or interest in such property and
all title or interests of such person having a right of
redemption in, or the right to foreclose a subordinate mortgage
or other lien against such property shall thereby be extinguished
and terminated.


Sec. 1353.     CONVEYANCE.

1.   After the property has been sold, the officer conducting the
     sale shall execute a deed to the purchaser. The plaintiff,
     or any other party, may become a purchaser.

2.   Before a deed is executed to the purchaser, the plaintiff
     shall file the mortgage and any assignment not shown to have
     been lost or destroyed in the office of the clerk, unless it
     is in a form which can be recorded; in which case it shall
     be recorded in the counties where the lands are situated;
     the expense of filing or recording and entry shall be
     allowed in the taxation of costs; and, if filed with the
     clerk, he shall enter in the minutes the time of filing.

3.   The conveyance vests in the purchaser the same estate only
     that would have vested in the mortgagee if the equity of
     redemption had been foreclosed. Such a conveyance is as
     valid as if it were executed by the mortgagor and mortgagee,
     and, except as provided in section 1315 and subdivision 2 of
     section 1341, is an entire bar against each of them and
     against each party to the action who was duly summoned and
     every person claiming from, through or under a party by
     title accruing after the filing of the notice of the
     pendency of the action.


Sec. 1354.     DISTRIBUTION OF PROCEEDS OF SALE.

1.   The officer conducting the sale shall pay, out of the
     proceeds, unless otherwise directed, the expenses of the
     sale, and pay to the plaintiff, or his attorney, the amount
     of the debt, interest and costs, or so much as the proceeds
     will pay and take the receipt of the plaintiff, or his
     attorney, for the amount so paid, and file the same with his
     report of sale.

2.   The officer conducting the sale shall pay out of the
     proceeds, unless the judgment otherwise directs, all taxes,
     assessments, and water rates which are liens upon the
     property sold, and redeem the property sold from any sales
     for unpaid taxes, assessments or water rates which have not
     apparently become absolute. In any city having a population
     of one million or more, such officer shall pay out of the
     proceeds any liens or incumbrances placed by a city agency
     upon the real property which have priority over the
     foreclosed mortgage. The sums necessary to make those
     payments and redemptions are deemed expenses of the sale.
     The provisions of this subdivision shall not apply to any
     judgment in an action wherein any municipal corporation of
     this state is the plaintiff and the purchaser at the
     foreclosure sale thereunder.

3.   The officer conducting the sale after fully complying with
     the provisions of subdivisions one and two of this section
     and if the judgment of sale has so directed shall pay to the
     holder of any subordinate mortgage or his attorney from the
     then remaining proceeds the amount then due on such
     subordinate mortgage, or so much as the then remaining
     proceeds will pay and take the receipt of the holder, or his
     attorney for the amount so paid, and file the same with his
     report of sale.

4.   When the sum of the amount of the proceeds before any
     distributions are made under this section and the amount of
     any other liens which the real property is taken subject to
     is one million dollars or more, the officer conducting the
     sale shall pay, out of the proceeds remaining after the
     provisions of subdivisions one, two and three of this
     section have been complied with, the amount of tax on gains
     derived from certain real property transfers due from the
     defendant pursuant to article thirty-one-B of the tax law to
     the state tax commission. Such amount shall be ten per
     centum of the sum of the amount of the proceeds before any
     distributions are made under this section and the amount of
     any other liens which the real property is taken subject to,
     unless the defendant shall furnish the officer conducting
     the sale a statement of tentative assessment or statement of
     no tax due issued by the state tax commission, in which case
     the officer shall pay over to the state tax commission the
     amount stated on such tentative assessment or statement of
     no tax due. The officer conducting the sale shall, along
     with such payment, file returns and information in
     accordance with procedures established by the state tax
     commission.

5.   All surplus moneys arising from the sale shall be paid into
     court by the officer conducting the sale within five days
     after the same shall be received.


Sec. 1355.     REPORT OF SALE; CONFIRMATION.

1.   Within thirty days after completing the sale and executing
     the proper conveyance to the purchaser, unless such time be
     extended by the court within said thirty days, the officer
     making the sale shall file with the clerk his report under
     oath of the disposition of the proceeds of the sale,
     accompanied by the vouchers of the persons to whom payments
     were made.

2.   A motion to confirm such report of sale shall not be made
     within three months after the filing of the report and shall
     in any event be made not later than four months after the
     filing of such report, except that if there be no surplus
     moneys arising from the sale of the mortgaged premises under
     such judgment, an application for confirmation of the report
     of sale may be made at any time after the report shall have
     been filed eight days. Where the report of sale shows
     surplus money the party moving for confirmation of the
     report of sale shall present with his motion papers a proper
     voucher for the surplus moneys showing that they have been
     paid into court, a certificate of the clerk specifying the
     notices of claim to the surplus moneys, if any, so filed
     with him, and an affidavit showing any other unsatisfied
     lien on the property.


Sec. 1361.     APPLICATION FOR SURPLUS; REFERENCE.

1.   Any person claiming the surplus moneys arising upon the sale
     of mortgaged premises, or any part thereof, either in his
     own name, or by his attorney, at any time before the
     confirmation of the report of sale, may file with the clerk
     in whose office the report of sale is filed, a written
     notice of such claim, stating the nature and extent of his
     claim and the address of himself or his attorney.

2.   On the motion for confirmation, or at any time within three
     months thereafter, on notice to all parties who have
     appeared in the action or filed claims, on motion of any
     party to the action, or any person who has filed a notice of
     claim on the surplus moneys, the court, by reference or
     otherwise, shall ascertain and report the amount due to him
     or any other person who has a lien on such surplus moneys,
     and the priority of the several liens thereon and order
     distribution of surplus moneys.

3.   The owner of the equity of redemption, or any party who has
     appeared in the action or any person who files a notice of
     claim or who has a recorded lien against the property shall
     be given notice by mail or in such other manner as the court
     shall direct, to attend any hearing on disposition of
     surplus money.


Sec. 1362.     PAYMENT OF SURPLUS OUT OF COURT.

1.   Upon confirmation of the report of sale, or upon such
     proceedings as are provided in section 1361, the court shall
     order the payment of the surplus proceeds of sale out of
     court to such persons as are entitled thereto.

2.   If the property sold has included a right to dower, whether
     inchoate or consummate, a tendency by curtesy, or any other
     estate for life or years, the owner of such particular
     estate in the real property sold is entitled to receive from
     the surplus, in satisfaction of his estate or interest,
     either a sum in gross or the earnings of a sum invested for
     his benefit. The determination as to whether a sum in gross
     or the earnings of a sum invested shall be awarded to the
     owner of such particular estate shall be governed by the
     provisions of section 968 with respect to the proceeds of a
     sale in partition.

3.   If real property or an interest in real property which is
     liable to be disposed of as prescribed in article thirteen
     of the surrogate's court act, be sold to satisfy a mortgage
     or other lien thereon, which mortgage or lien accrued during
     the decedent's lifetime, the surplus money shall be paid in
     to the surrogate's court having jurisdiction to issue
     letters testamentary or of administration upon the estate of
     the decedent, in the following cases: (a) If eighteen months
     have not elapsed since the date when letters testamentary or
     of administration were first issued. (b) If a proceeding for
     a judicial settlement of the accounts of such executor or
     administrator has been commenced within eighteen months from
     the date of the issue of such letters and is still pending.
     (c) If no such letters have been issued and two years have
     not elapsed since the death of the decedent.


Sec. 1371.     DEFICIENCY JUDGMENT.

1.   If a person who is liable to the plaintiff for the payment
     of the debt secured by the mortgage is made a defendant in
     the action, and has appeared or has been personally served
     with the summons, the final judgment may award payment by
     him of the whole residue, or so much thereof as the court
     may determine to be just and equitable, of the debt
     remaining unsatisfied, after a sale of the mortgaged
     property and the application of the proceeds, pursuant to
     the directions contained in such judgment, the amount
     thereof to be determined by the court as herein provided.

2.   Simultaneously with the making of a motion for an order
     confirming the sale, provided such motion is made within
     ninety days after the date of the consummation of the sale
     by the delivery of the proper deed of conveyance to the
     purchaser, the party to whom such residue shall be owing may
     make a motion in the action for leave to enter a deficiency
     judgment upon notice to the party against whom such judgment
     is sought or the attorney who shall have appeared for such
     party in such action. Such notice shall be served personally
     or in such other manner as the court may direct. Upon such
     motion the court, whether or not the respondent appears,
     shall determine, upon affidavit or otherwise as it shall
     direct, the fair and reasonable market value of the
     mortgaged premises as of the date such premises were bid in
     at auction or such nearest earlier date as there shall have
     been any market value thereof and shall make an order
     directing the entry of a deficiency judgment. Such
     deficiency judgment shall be for an amount equal to the sum
     of the amount owing by the party liable as determined by the
     judgment with interest, plus the amount owing on all prior
     liens and encumbrances with interest, plus costs and
     disbursements of the action including the referee's fee and
     disbursements, less the market value as determined by the
     court or the sale price of the property whichever shall be
     the higher.

3.   If no motion for a deficiency judgment shall be made as
     herein prescribed the proceeds of the sale regardless of
     amount shall be deemed to be in full satisfaction of the
     mortgage debt and no right to recover any deficiency in any
     action or proceeding shall exist.

4.   Notwithstanding the foregoing provisions and irrespective of
     whether a motion for a deficiency judgment shall have been
     made or, if made, shall have been denied, the court shall
     direct that all moneys remaining in the hands of a receiver
     of the rents and profits appointed in the action, after the
     payment of the receiver's fees and the expenses of the
     receivership, or any moneys remaining in the hands of a
     mortgagee in possession or an assignee of the rents and
     profits of the premises, shall be paid to the plaintiff to
     the extent of the amount, if any, by which the judgment of
     foreclosure and sale exceeds the amount paid for the
     property upon the sale.


Sec. 1391.     PROCEEDING FOR SHARE OF UNKNOWN HEIRS.

Sections 991 and 992 shall apply to an action to foreclose a
mortgage on real property.




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