The laws governing mortgages and foreclosures can vary greatly from state to state. The rate of foreclosure homes in New York is well below average and the state's laws are somewhat favorable toward borrowers.

New York is both a deed-of-trust and two-party mortgage state, meaning that either mortgage arrangement is legal. Deed of trust loans require a third party's participation and a deed of trust, which establishes the third party as a trustee and specifies the terms under which the property is to be foreclosed. The trustee keeps possession of the deed to the property until the loan is paid in full, and if the borrower defaults the trustee is responsible for handling the foreclosure process. Traditional two-party mortgage arrangements are also allowed under state law, but are less common. In a two-party mortgage, a lender must sue the borrower successfully to recover the property upon default.

The foreclosure process in New York is about average length, with most cases being settled within 120 days. The borrower is also denied what's called “right of redemption”. This rule, which is embraced by many states, allows the borrower to retake possession of a property by bringing the loan current and paying fees and legal costs that the lender has accrued during the foreclosure process.

Thankfully for homeowners, New York has enacted heavy protections against foreclosures since the housing and credit markets collapsed. There is a 90-day minimum before a foreclosure sale can take place, which helps explain why New York's numbers were so low in 2009.

New York was one of the better states for foreclosure statistics last year, posting a rate of below 1 percent and a total of 50,369. The worst county in New York was Kings, which encapsulates the borough or Brooklyn in New York City.