In a foreclosure lawsuit in Kings County before Justice Johnny Bayes, a set of facts was presented to the court concerning issues involving a statute of limitations defense and a mortgage modification. The Bank of New York had initiated a foreclosure lawsuit and thereafter brought a motion for summary judgment (a motion claiming there are no issues of fact). The defendant in this case, McQueen, brought a cross application for summary judgment. She also asked for a declaratory judgment which argued the statute of limitations had run on the mortgage and therefore the mortgage was now unenforceable.
Bank of New York’s Defense
The Bank of New York claimed McQueen had submitted a mortgage loan modification application and correspondence requesting information about the mortgage. The Bank of New York asserted these two items tolled (stopped) the running of the statute of limitations on the mortgage. It should be noted the Bank of New York rejected the mortgage modification application. However, even after they rejected the application, they alleged in their court documents the modification application and the correspondence resurrected the expired statute of limitations and also constituted a further acknowledgment of the debt.
Court Doesn’t Buy Bank of New York’s Defense
Justice Baynes stated that the request for a mortgage modification was simply a settlement offer. Settlement offers do not contain an acknowledgment of liability. Therefore, settlement offers such as mortgage modifications are not admissible at trial as evidence of liability. Justice Baynes ruled the application for request for a modification was not an offer to pay the mortgage. The letters did not constitute a promise to pay by McQueen. Bank of New York’s motion was denied and McQueen’s cross motion was granted. The Judge ruled that the statute of limitations had run on the mortgage and the mortgage was therefore unenforceable.
Elliot S. Schlissel and his associates have been helping homeowners stay in their homes and fight foreclosure lawsuits for more than 45 years.
