Court cancels $340,000 mortgage as FAPA blocks U.S. Bank defense
That July, Mortgage Electronic Registration Systems, known as MERS, filed a foreclosure action as nominee for Lehman. A foreclosure judgment was entered in February 2010 – but a year later, the court vacated it after finding the borrower had not been properly served.
That vacated judgment sat untouched for over a decade. In August 2022, the borrower sued under RPAPL 1501(4) to cancel the mortgage from the public record, arguing the six-year statute of limitations for foreclosure had expired.
The argument: MERS accelerated the full mortgage balance when it filed the 2008 complaint, starting the six-year clock. More than 14 years had passed. Time was up.
U.S. Bank, now holding the loan, pushed back: MERS never had standing to commence the 2008 action, so the acceleration was invalid and the clock never started.
FAPA was built to shut down exactly that argument. Under CPLR 213(4)(b), a defendant cannot claim a mortgage was never validly accelerated unless the prior action was dismissed on “an expressed judicial determination, made upon a timely interposed defense, that the instrument was not validly accelerated.” The 2008 action was tossed for bad service – not on acceleration grounds. Estoppel applied.
