Lender Loses Mortgage in NY Again Due to Time-Barred Foreclosure Action



As you may remember from an older blog post (tinyurl.com/NY-Enforceability-Issue), many have fallen victim to a New York law that threatens the enforceability of a mortgage. New York has a six year statute of limitation on finishing the foreclosure after the acceleration of debt. If the lien holder does not property decelerate the debt within the six years from the start of the foreclosure, without reinstating the debt through a modification, the mortgage will become unenforceable.

We recently came across another instance where the lender lost the mortgage due to this statute. The lender first began foreclosure proceedings in 2009. Since the lender failed to properly decelerate the debt within the six year statute, the borrower filed a countersuit against the lender seeking a discharge of the mortgage. The court sided in favor of the borrower and filed the below judgment which grants the borrower’s request to cancel the mortgage.

To help investors avoid being plagued by this unenforceability issue in New York, ProTitleUSA reports all foreclosure cases, even those that are dismissed, so that our clients can review that all cases were properly decelerated.