In a case before Justice Yvonne Lewis sitting in the Supreme Court Foreclosure Part in Kings County, defendant Ellery Beaver LLC brought an application for summary judgment seeking the discharge of HSBC’s mortgage on their property. HSBC brought a cross application for dismissal of the action by the plaintiff.
In this case, Renee took out a mortgage on her property. The mortgage was assigned to HSBC from the prior financial institution. HSBC brought a foreclosure action in 2006 claiming Renee defaulted in making the mortgage payments. HSBC’s original lawsuit was dismissed. In 2009, a second foreclosure action was started by HSBC. This was also conditionally dismissed in 2013 for failure to prosecute by HSBC.
Renee eventually sold the property to Ellery. More than a year passed and thereafter HSBC brought an application to restore the 2013 lawsuit which had been dismissed. Justice Yvonne Lewis denied this request. HSBC took the position the statute of limitations hadn’t run. However, the court took the position since HSBC accelerated the debt upon the filing of the first lawsuit, the statute of limitations had run and therefore any attempt to foreclose was time barred. The judge took the position Ellery was entitled to a judgment dismissing the mortgage because HSBC failed to successfully commence a foreclosure lawsuit within the six year statute of limitations time period. The judge ordered HSBC’s mortgage be dismissed and discharged.
Conclusion
This is a major win for homeowner’s rights. Even though lawsuits can be held to be time barred under the statute of limitations, it is very unusual a judge will go so far as to remove the mortgage lien from the property even though action upon the note is time barred.
The Consumer Financial Protection Bureau is reviewing new regulations which will put the brakes on a contentious practice called mandatory arbitration. Under mandatory arbitration rules, consumers must take disputes they have with financial institutions to third party mediators. This prevents them from going into courts and presenting their issues to judges. Consumer advocates feel this practice benefits large financial institutions, credit card issuers and financial service providers to the detriment of consumers.
Justice Phyllis Orlikoff Flug sitting in a Foreclosure Part in Queens County Supreme Court recently had a case where the defendants moved to dismiss the bank’s lawsuit in a foreclosure legal action. The lawsuit had been initiated against the defendants Michael Pertab and Cholying Pertab in 2010. Michael had been served by personal service in July 2010 and Cholying had been served by substituted legal service in August 2010.
New York Real Property Actions and Proceedings Law (RPAPL) Section 1304 requires financial institutions and loan servicing companies to provide homeowners, on residential property, at least 90 days notice before initiating a 
Has the bank initiated a foreclosure action against you? How do you know the bank has acted appropriately with regard to fulfilling their obligations as a financial institution? The question then becomes, is the 
If you are behind on your mortgage payments, do not despair. Foreclosure lawsuits can be fought in the courts in New York. If you receive a letter from your financial institution indicating your home is going into foreclosure or you are served with a Summons and Complaint, your best defense is to go on the offense.
