Statute of Limitations Defenses in Foreclosure Losses: Six Year Statute of Limitations
There is a six (6) year statute of limitations with regard to bringing a foreclosure lawsuit on a mortgage by a creditor. When the lender accelerates the mortgage (calls the entire balance due and owing, the statute of limitation period starts to run).
Acceleration of the Mortgage
When the bank accelerates a mortgage they must provide written notice to the homeowners. The bank is required to provide the homeowners with 90 days notice they they are accelerating the mortgage before they can initiate a foreclosure lawsuit. The failure of the bank to provide the homeowner with this 90 days notice gives the homeowner a legal defense to to foreclosure lawsuit. Our law office has had foreclosures dismissed due to the banks failure to provide the homeowner with this 90 day notice.
Restarting the Six Year Statute of Limitations
If the homeowner make a payment on a mortgage loan, enters into a mortgage modification or files a Chapter 13 bankruptcy that acknowledges the mortgage debt and agrees to repay it, each of these actions will restart the statute of limitations running all over again. The statute of limitations is a complete defense to a foreclosure lawsuit. If the 6 year period is approaching from the time the bank accelerated the mortgage the homeowner should be very careful to avoid taking any actions that will restart the statute of limitation period again. It is strongly suggested if you believe you have a statute of limitations defense, that you consult with an experienced foreclosure defense lawyer and get his or her opinion regarding this issue.
Elliot S. Schlissel and his associates for more than 3 decades have been representing homeowners throughout the Metropolitan New York area in foreclosure lawsuits. The law firm strives to keep homeowners in their homes and stop foreclosure cases from going forward.
Mortgages and Death of a Homeowner
When you die your mortgage payments are still due and owing. If your lender does not receive the mortgage payments when you die it can move forward to bring a foreclosure lawsuit against your home. The best way to deal with mortgage payments in the event you die is to have an estate plan set up while you are living to deal with this issue. One way of covering the balance due on your mortgage would be to take out a life insurance policy in an amount sufficient to cover your mortgage. There are specific life insurance policies designed for this purpose.
In the event you are married, have a significant other or have a co-borrower upon your death the cosigner or co-borrower would be liable to make the mortgage payments. However if you are the breadwinner and have no life insurance your co-owner or co-borrower may not be in a position to continue to make the mortgage payments. If the co-owner or co-borrower is not in a position to make the mortgage payments the best route may be to sell the home if there is equity in the home. However, if there are children attending local schools, this may not be a practical solution.
Have a Will
Should you write a will, you can make arrangements in the will with regard to what happens to your home in the event of your death. The issue is not who makes the mortgage payments but who inherits the house upon your death. A will can be also tied into a life insurance trust set up to pay off the mortgage when you die. An estate plan can see to it that your home passes to your heirs in a manner that allows them to keep your home.
The best way to deal with death related issues related to your mortgage or otherwise would be to meet with an estate planning attorney and make a plan in the event of premature death or not so premature death.
Elliot S. Schlissel, Esq. is an estate lawyer representing clients in drafting of wills, trusts and probating wills and trusts throughout the Metropolitan New York area for more than 3 decades!.
Judge Cancels Mortgage against Wife Which Was Fraudulently Obtained
Justice Carmen Velasquez sitting the Supreme Court part of Queens County was recently presented with an unusual case. A wife and husband had married in 1981. The home they lived in was purchased by the wife in 1987. In 1996 a divorce action was initiated. A divorce agreement was entered into in 1997. Pursuant to the terms of this agreement the wife received 100% ownership interest in the home that she purchased in 1987.
Fraudulent Mortgage
The wife claimed her husband and his father had fraudulently obtained a mortgage for $840,000.00 against her home. The wife claims she never signed any documents giving her husband and his father a mortgage on her home. The husband took the position that the signatures on the mortgage were the wife’s, she claimed they were forged.
Wife’s Lawsuit
The wife brought a case seeking the declaration that the husband be barred from all claims to the property, she be considered the lawful owner of the property and the fraudulentmortgage be cancelled and discharged.
Justice Velasquez found the wife’s testimony to be credible and reliable. She took into consideration there was no documentary evidence of a mortgage loan by the wife to the husband’s father. She also took into consideration the wife came from an affluent family and had no need to borrow money. In the end Judge Velasquez granted the wife’s demand for relief, cancelled, removed and discharged the mortgage from the wife’s property.
Elliot S. Schlissel, Esq. is a foreclosure lawyer representing clients in obtaining and litigating foreclosure lawsuits throughout the Metropolitan New York area. Elliot S. Schlissel, Esq. and his associates have been defending homeowners in foreclosure proceedings for more than 45 years.
$2.5 Million Foreclosure Dismissed Based on Statute of Limitations Defense
US Bank brought a foreclosure lawsuit against Samuel Rudick. Samuel Rudick and Patricia Rudick, who is deceased, took out a $1.75 million loan for their Westhampton home in 2003. In 2004 their loan was modified. In 2006 the Rudicks took out a second mortgage on their home. During 2006 the first and second mortgages on their home were consolidated into a third mortgage for approximately $2.5 million.
The original financial institution regarding this matter was JP Morgan Chase. Chase eventually sent a notice of default to the Rudicks which stated: “that they had defaulted on their mortgage loan by failing to tender their monthly payments.” A foreclosure lawsuit was brought by JP Morgan Chase in 2008. Chase discontinued this lawsuit. Eventually a second foreclosure action was commenced. A motion was made to dismiss the second lawsuit in 2014. The basis of the dismissal application was that the 6 year statute of limitations had expired since the loan had been accelerated (called due and owing), more than 6 years ago.
A Third Foreclosure Proceeding
US Bank acquired the mortgage from Chase Manhattan Bank. US Bank therefore started a third foreclosure action. This lawsuit was also dismissed.
Conclusion
Homeowners whose homes go in foreclosure should consult with an experienced foreclosure lawyer to see if there is a valid defense to the lawsuit. The homeowners in this case as a result of the excellent legal work by their attorneys came into a $2.5 million windfall!
Foreclosure Action Dismissed; Statute Of Limitations Expired
In a case before Justice David Elliot in Queens County, Supreme Court a foreclosure action was brought by Americas Wholesale Lender. The lender claimed the defendants were in default in their mortgage payments.
Motion to Dismiss
The defense in this case made a pre-answer application to the court asking to dismiss the action based on the fact it was time barred by the statute of limitations. The statute of limitations in foreclosure cases is 6 years from the time the debt is accelerated and/or the entire amount is called to be due and owing. In this case the defendants were able to show the debt was accelerated by commencement of a foreclosure action in 2008 which was subsequently discontinued.
Statute of Limitations Expired Two Years Earlier
The plaintiff in this case brought this foreclosure lawsuit more than 2 years after the expiration of the 6 year statute of limitation period. In their motion the defendants were able to adequately establish the case was time barred by the 6 year statute of limitations.
Judge Elliot in his decision found the plaintiff did not raise an issue of fact that the statute of limitations was re-set by the defendant’s alleged payment in 2010. In addition the attorneys for the financial institution did not establish there was a re-acknowledgment of the debt via a letter requesting a mortgage modification. The defendants’ motion to dismiss the lawsuit was granted.
Conclusion
In each and every case where a foreclosure is initiated against a homeowner the question as to whether there is a complete defense based on the statute of limitation must be evaluated. Should there be a statute of limitations defense an appropriate motion to dismiss should be made.
Elliot S. Schlissel is a foreclosure defense lawyer representing homeowners throughout the Metropolitan New York area for more than 3 decades.
New Law Allows Homeowners to File Late Answers In Foreclosure Case
In the case of first impression Justice William Giacomo sitting in the Supreme Court foreclosure part in Westchester County was presented with an issue concerning the filing of a late answer by a homeowner. JP Morgan Chase had started a foreclosure lawsuit on June 8, 2016. The defendant, Hernandez, did not submit a notice of appearance and a written answer; however she did appear at 5 foreclosure settlement conference meetings at the courthouse. The case was eventually removed from the foreclosure settlement part on March 15, 2016. On March 30, 2016 she filed a written answer. The attorneys for JP Morgan Chase rejected the answer. They claimed that the time to submit an answer had expired.
Hernandez brought a motion requesting the court force JP Morgan Chase to accept the late filing of the answer. Justice William Giacomo in his decision held the intent of the new legislation was to allow pro se defendants (defendants who do not have an attorney) who participate in foreclosure conferences to submit answers after the foreclosure conferences end even though they are untimely. In this case Judge Giacomo stated that Hernandez was served with a summons and complaint on June 18, 2016 and she participated in foreclosure settlement conferences. The court noted that 15 days after the case was removed from the foreclosure conference part Hernandez filed her answer. The Judge held that the intent of the new legislation was to allow individuals representing themselves to participate in the litigation process. In this case he found JP Morgan Chase would not suffer any prejudice in permitting Hernandez to file a late answer. He therefore granted her motion and a late answer was now considered to be timely served.
Conclusion
This is a terrific decision for homeowners. Many homeowners come into my office and participate for months and months in the foreclosure settlement conference part only to have their mortgage modification applications denied. They then find themselves in a litigation court part, however since they have not submitted an answer they have defaulted in the case and the judge won’t hear their side of the story. This new statute allows homeowners to file late answers and participate in the legal proceedings regarding the foreclosure on their home.
Elliot S. Schlissel and his associates are foreclosure attorneys, with more than 100 years of combined legal experience, representing homeowners on foreclosure cases throughout the metropolitan New York area. We can be reached at 1-800-344-6431, (516) 561-6645, or (718) 350-2802 for a free consultation.
The Foreclosure Defense
Elliot S. Schlissel and his associates are foreclosure attorneys, with more than 100 years of combined legal experience, representing homeowners on foreclosure cases throughout the metropolitan New York area. They can be reached at 1-800-344-6431, (516) 561-6645, or (718) 350-2802 for a free consultation.
Case Dismissed: Bank Didn’t Provide 90 Day Pre Foreclosure Notice
A foreclosure legal action was brought by M&T Bank. Dr. Colleen Farrell submitted an answer to the foreclosure lawsuit. In it she claimed she had not been served with the preliminary notice the bank was putting the property into foreclosure required under New York Real Property Actions and Proceedings Law section 1304.
Motion to Dismiss Lawsuit
The bank made a motion for summary judgement and Dr. Farrell opposed the motion and moved to dismiss the bank’s complaint for failure to properly serve a 90 day notice prior to initiating the foreclosure lawsuit. In the application, Farrell claimed the service on his receptionist of the 90 day notice was invalid. He took the position she was not authorized to accept the service of this document. M&T Bank took the position Dr. Farrell was properly served. They claimed it was irrelevant as to whether his receptionist was authorized to accept service. In addition the bank claimed Farrell wasn’t even entitled to a 90 day notice under Real Property Actions and Proceeding Law section 1304. They took this position because the doctors office was not his principal place of residence. The court took into consideration that while Dr. Farrell claimed his receptionist was not authorized to accept service, she did not deny that she had been served. The court ruled whether or not she had authority to accept service was irrelevant since she had been served.
90 Day Pre Foreclosure Notice was Required
The court ruled however that section 1304 90 day pre foreclosure service requirements applied to Farrell even if he was not living at the premises. Since the bank failed to show strict compliance with the 90 day pre foreclosure notice requirement the court granted Farrell’s cross motion to dismiss the complaint due to the bank not having met its minimum statutory requirements prior to initiating the foreclosure lawsuit.
