It’s hard to believe that in 2019, the statute of limitation (SOL) to enforce a mortgage is still an unsettled and dangerous issue in New York. While evolutions in case law have largely settled concerns in other states such as Florida, numerous SOL court decisions in New York have left servicers and their attorneys with more questions than answers. The ever-changing law is exacerbated by the fact that New York has four Appellate Divisions, each with jurisdiction over different counties. This causes splits in the law, and the same facts can lead to opposite legal results in properties that are located just miles apart within the same state.
What we know for sure (we think) is that the limitation period is six years from acceleration. Once the mortgage debt is accelerated, “‘the borrowers’ right and obligation to make monthly installments cease[s] and all sums [become] immediately due and payable,’ and the six-year Statute of Limitations begins to run on the entire mortgage debt” [EMC Mortgage Corp. v. Patella, 279 A.D.2d 604, 605 (2d Dept. 2001)]. However, case law continues to develop across the state, including how and when acceleration occurs and whether and how a loan can be deaccelerated.
As to when the six-year period starts running, it is “well settled that with respect to a mortgage payable in installments, there are ‘separate causes of action for each installment accrued, and the Statute of Limitations [begins] to run, on the date each installment [becomes] due’ unless the mortgage debt is accelerated” [Loiacono v. Goldberg, 240 A.D.2d 476, 477 (2d Dept. 1997)]. Restated simply, the statute of limitations does not begin to run on the entire mortgage debt unless and until there has been an acceleration of the mortgage debt. [See, e.g., Nationstar Mortgage, LLC v. Weisblum, 143 A.D.3d 866 (2d Dept. 2016).]