Fannie Mae blows a one-year deadline and loses Bronx foreclosure case

Fannie Mae blamed COVID-19. The court was not persuaded. The pandemic did not begin until March 2020, more than a year after the homeowner had already defaulted. The deadline had passed before the first lockdown. 

From there, Fannie Mae switched tactics. It argued the amended complaint was substantively identical to the original, so no new answer was needed. The court rejected that – because Fannie Mae had already taken the opposite position in the same case, arguing earlier that the homeowner had defaulted by not answering the amended complaint. A party cannot flip its own argument mid-case because the first version did not work, the court said, citing the “well-settled principle”. 

The court also found the homeowner had not given up her right to seek dismissal. Her only activity after the default was filing a COVID-19 hardship declaration in November 2021 – not enough to count as “active litigation of the action or participation in the action on the merits”.

Fannie Mae’s last argument involved CPLR 3408, which gives a homeowner who appears at a foreclosure settlement conference a 30-day window to file a late answer. The homeowner here never filed one. Her 2018 default was never vacated, and the trial court dismissed the case after that window closed. 

For servicers and foreclosure teams in New York, the takeaway is plain: the one-year default judgment deadline under CPLR 3215(c) is not flexible. Miss it, and the case goes away.