Bank of America wins reverse mortgage foreclosure over false occupancy claims
According to the decision, the borrower moved into a nursing home in September 2008 – barely eight months after the loan closed. Her son and daughter-in-law, who became the property’s record owners, argued the move happened no later than December 2009 at the outside.
Either date would have started the six-year statute of limitations clock well before Bank of America filed the foreclosure action in 2023. On paper, the lender was years too late.
But here is the wrinkle. Each year from 2011 through 2019, annual occupancy certifications were sent to Bank of America – signed by the borrower herself – stating she still lived in the home. The son and daughter-in-law moved for summary judgment, asking the court to toss the case as time-barred.
The court applied equitable estoppel, where a party’s own misconduct during the limitations period prevents them from using the time bar as a shield. Rather than sending the estoppel question to trial – the usual approach – the court found the evidence strong enough to decide it outright. The defendants’ own admissions in their motion papers, paired with the occupancy certifications the plaintiff submitted in opposition, showed that the lender’s delay was a direct result of misconduct during the limitations period.
Notably, the appellate court assumed without deciding that the statute of limitations had actually expired. It did not need to resolve that question because the estoppel finding disposed of the defense either way.
