Statute of Limitations and a Mortgagee in Possession

For a foreclosure commenced in 2010 the Plaintiff elected to get in touch with thanks to the whole sum secured by the home loan. That motion was dismissed in 2012. In 2016, Plaintiff brought an action beneath New York’s Genuine Residence Steps and Proceedings Law Report 15 (“Action to compel the resolve of a assert to real property”) to have the home loan canceled and discharged of file on the ground that the statute of constraints experienced expired. The Defendant-mortgagee asserted that Plaintiff had abandoned the assets and that Defendant’s currently being in possession of the assets due to the fact 2013 pursuant to paragraph nine of the mortgage (“Lender’s Appropriate to Safeguard Its Legal rights in the Property”) had tolled the statute of limits. Under paragraph 9, if the borrower abandoned the house, the mortgagee may “do and shell out for whatsoever is fair or acceptable to safeguard Lender’s fascination in the Property and Lender’s legal rights.”The Supreme Court, Westchester County, grant of the Defendant’s movement for summary judgment dismissing the complaint was reversed by the Appellate Division, Second Section, which also granted the Plaintiff’s movement to dismiss the counterclaim to foreclose the mortgage loan as currently being time-barred. According to the Appellate Division, even though

“[t]he statute of limitations will not operate from a ‘mortgagee in possession’ because the mortgagor’s consent to that possession is a continuing acknowledgment of the credit card debt [citations omitted]…[T]he mere truth that [the Defendant] took steps to defend its legal rights in the home underneath paragraph 9 of the home loan does not create that the get-togethers reached an settlement for [the Defendant] to get possession of the premises with all the legal rights and obligations that possession entails. Paragraph 9 of the property finance loan basically will allow the mortgagee to take actions to protect its legal rights in the residence [citations omitted], but the exercising of these legal rights cannot be construed as the mortgagor’s continuing acknowledgment of the financial debt so as to toll the statute of limitations.”

Mardenborough v. U.S. Financial institution N.A., 2022 NY Slip Op 00034, decided January 5, 2022, is posted at https://www.nycourts.gov/reporter/3dseries/2022/2022_00034.htm.