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COVID-19: Residential Mortgage Foreclosure and Payment Relief Programs

skyseoroundtable November 20, 2021

Foreclosure Defense

Foreclosure laws are very complex, and it is common for lenders to have made an error in the process. Such mistakes often include timing or giving notice – and this may lead to a foreclosure defense. 

Statute of Limitations for a Mortgage Foreclosure  

A common defense to a lender’s attempt to foreclose involves the statute of limitations, which governs the time that a lender can pursue a foreclosure after the homeowner stops making mortgage payments. If the lender does not meet the statute of limitations, the foreclosure action can be dismissed on that basis alone, allowing the defendant to win the statute of limitation defense. 

A foreclosure action must be presented in the Supreme Court in the county in which the property is located. Every state has its own statute of limitations for a mortgage foreclosure action. New York’s CPLR §213 provides a six-year statute of limitations for the enforcement of contracts. Since a mortgage is considered to be a “contract”, foreclosure actions must begin within six years. Failure to bring a foreclosure action within that timeframe can result in dismissal of the foreclosure action and removal of the lien. 

What Triggers the Statute of Limitations? 

According to New York State law, statute of limitations is triggered by an acceleration letter demanding immediate payment of entire mortgage balance. Pursuant to New York RPAPL §1304 ( lenders are required to send a borrower a written notice 90 days before a foreclosure action is commenced stating that they are at risk of foreclosure. The notice will usually contain the following: 

  • The number of days the loan has been in default
  • The total amount due in order to satisfy the default
  • Notice that the lender has the right to commence a foreclosure action after the 90 day notice period
  • A list of local non-profit agencies that provide counseling for housing

The six-year statute of limitations is only triggered by a written acceleration notice that shows the lender’s immediate intent to collect the debt in full. Anything less than a clear and overt act will not be sufficient to trigger the statute of limitations prior to the filing of the foreclosure summons and complaint in the Supreme Court. Written notices, demand letters, and verbal threats that the borrower is in default and must become current on the loan do not constitute acceleration as to trigger the statute of limitations.,through%20a%20formal%20judicial%20process

What Stops (Tolls) the Statute of Limitations?

The statute of limitations for a debt may be stopped (tolled) by either an unconditional promise to pay the debt or an acknowledgment of the debt. This allows the time limitation on bringing a lawsuit to enforce payment of the debt to be deferred until the promise document has arrived. After such date, the statute of limitations will start again. 

Defenses to the Statute of Limitations 

Defenses to the statute of limitations include: 

  • De-acceleration – as long as the de-acceleration letters are within the limitations period by the notice provision of the mortgage, it would prevent the statute of limitations from running. De-acceleration can’t be internal, but requires overt acts like letter forgiving arrears or stating that they are owed, but not a basis for acceleration.
  • Modification trial payments or any payments made by the defendant. 
  • A bankruptcy tolls the 6 years statute of limitations.
  • Safe Harbor extends the statute of limitations for 6 months if the case is dismissed not on the merits (except if for jurisdiction defect or voluntary dismissal). A Safe Harbor is a legal stipulation to eliminate regulatory liability in certain situations, provided that certain conditions are met.

If the statute of limitation defense is not asserted on the Answer, it could be waived.

Contact a Long Island Foreclosure Attorney 

A key question to consider when facing foreclosure is whether you have valid grounds to challenge it. A qualified Long Island foreclosure attorney who is experienced in the foreclosure process can analyse your case to determine whether the statute of limitations period has run. 

The Law Office of Ronald D. Weiss, P.C. is your premier foreclosure attorney on Long Island and can analyse the specific facts of your case in order to determine whether your lender has violated the statute of limitations, which can result in a discharge of your debt. The firm’s foreclosure lawyers will assist you with the necessary paperwork and legal analysis as these cases tend to be very complex and technical. Maximize your advantage by having our foreclosure attorneys on your side.

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