New York’s foreclosure-abuse law sinks lender’s stale mortgage claim
That filing is the whole ballgame. In New York, launching a foreclosure and demanding the full balance “accelerates” the loan: the entire debt becomes due at once, and a six-year window to sue starts counting down.
The property changed hands. In September 2002, Vista Holding, Inc. took title. The 2002 foreclosure was voluntarily discontinued in April 2004.
The loan kept resurfacing. Fairbanks Capital Corp. filed its own foreclosure in February 2003 and obtained a judgment of foreclosure and sale in May 2005. In January 2010, the court vacated it and dismissed the Fairbanks case for lack of standing – Fairbanks could not show it had the right to foreclose.
In October 2013, DLJ Mortgage Capital, Inc. brought the foreclosure behind this appeal. Vista, now the owner, moved to dismiss it as time-barred: the six-year clock started in 2002 with the Olympus action, and nobody ever reset it.
FAPA made that argument stick. Enacted in December 2022, it closed a path lenders had relied on for years. Both courts held that voluntarily discontinuing the 2002 action did not “de-accelerate the mortgage” nor “revive or reset” the statute of limitations. By 2013, DLJ was years past the deadline.
