Real Estate Insights: Before You Buy a Foreclosure Promissory Note, Read This

The NY Foreclosure Abuse Prevention Act Imposes New Limits on Developers and Investors

We’ll regularly share ideas you can use to increase your real estate knowledge and improve your deals. We bring in our own and outside experts to highlight important issues for owners, developers, lenders, investors, and the other professionals who help make the American Dream happen.

The recently signed New York Foreclosure Abuse Prevention Act puts a six-year statute of limitations on all foreclosure proceedings. The act is controversial, and it means extra due diligence for developers and investors. Here’s why.

Cornerstone Insights

The controversy comes from the fact that the six-year limit is retroactive.

Right now, the opportunity to buy foreclosure promissory notes is trending to become as high as 2009. That means lenders have six years to complete a foreclosure. It also means that foreclosure promissory notes become worthless six years after the foreclosure action started.

It’s not always easy to tell when a foreclosure action began, but Cornerstone can run a search and tell you when the foreclosure process began. You can find out early in the process whether a promissory note is worth pursuing before investing a lot of time and money.

If you’re thinking of purchasing foreclosures or if you have questions about any part of the real estate buying and selling process, please contact us.

Thanks, and have a great week.