New York court blocks US Bank’s second foreclosure try under FAPA
In January 2010, U.S. Bank National Association filed a foreclosure action against the property’s then-owner. The complaint sought the full outstanding loan balance, which under New York law accelerated the entire mortgage debt and started the six-year clock running on the whole amount owed. That 2010 action never went anywhere. A Kings County Supreme Court order directed its dismissal as abandoned in August 2013 under CPLR 3215(c).
Two years later, in November 2015, the bank allegedly sent the borrower a letter purporting to revoke the acceleration – a de-acceleration letter, in industry shorthand. Around the same time, the borrower transferred her entire interest in the property to 153 Pulaski Street, LLC.
Then came the second swing. In November 2022 – more than 12 years after the original acceleration – U.S. Bank filed a fresh foreclosure action against the LLC and others on the same mortgage. The LLC answered with a statute-of-limitations defense and moved for summary judgment, a ruling without a full trial. The Supreme Court, Kings County, granted the motion in a July 9, 2024, order. U.S. Bank appealed.
The appellate panel was not persuaded.
Justices found the LLC had demonstrated that the limitations period began running in January 2010 when the bank elected to call due the entire amount secured by the mortgage. The 2022 action came well beyond the six-year window. The bank, in opposition, failed to raise a triable issue of fact as to whether the statute was tolled or otherwise inapplicable.
