Time Is On Your Side: Understanding New York’s Foreclosure Statute of Limitations Defense
When facing foreclosure in New York State, homeowners often feel overwhelmed and powerless. However, one of the most powerful legal defenses available is the statute of limitations defense, which can potentially save your home and even eliminate your mortgage debt entirely. Understanding how this time-based defense works could be the key to protecting your property and financial future.
The Six-Year Rule That Can Save Your Home
The statute of limitations for a foreclosure in the state of New York is six years, as established under New York’s Civil Practice Law and Rules § 213. This means that lenders have six years to foreclose your property from the day they require you to pay the total remaining balance of your loan immediately.
The critical factor is understanding when this six-year clock starts ticking. Under New York law, the statute of limitations for starting a foreclosure after debt acceleration (when the lender files the suit) is six years. Acceleration can occur in three primary ways: The lender notifies the borrower that they intend to accelerate the debt; The lender demands payment in full of the mortgage loan; The lender files a foreclosure action in civil court.
Recent Legal Changes Strengthen Homeowner Protection
In a significant victory for homeowners, New York enacted the Foreclosure Abuse Prevention Act in 2022, which substantially strengthened statute of limitations protections. CPLR Section 3217 is amended to provide that a voluntary discontinuance of a mortgage foreclosure action does not reset the statute of limitations. This means that voluntary discontinuance of mortgage foreclosure action will not stop running the statute of limitations. Neither borrower nor lender can reset the statute of limitations.
Previously, under the Engel decision, lenders could effectively reset the statute of limitations clock by voluntarily discontinuing foreclosure cases. However, these two amendments overrule the Court of Appeals decision in Freedom Mortgage Corp. v. Engel, 37 N.Y.3d 1 (2021), providing homeowners with much stronger protection.
The Power of a Successful Defense
A successful statute of limitations defense can have dramatic consequences for homeowners. In the case of a successful statute of limitations defense, the action is dismissed “with prejudice,” meaning that the court rendered a decision on the merits of the action itself and it may not be re-filed. Even more remarkably, a successful defense [may] overcome a foreclosure action but may also cancel their obligation to pay any more of the mortgage debt and effectively award them their property free and clear.
A recent case demonstrates this powerful outcome: The court decided that the statute of limitations began when the loan was accelerated in 2006 and the lender’s discontinuing of the earlier action did not reset the limitations period. The court ultimately dismissed the foreclosure action. It also canceled and discharged the mortgage, so the homeowner got clear title to their property.
How to Assert This Defense
It’s crucial to understand that a statute of limitations defense is an affirmative defense, meaning you must raise it (if available) in court; the court won’t bring it up for you. When properly asserting this defense, a defendant can meet its initial burden of proving the action is time barred by showing that the summons and complaint in the present action were filed six years after the mortgage was accelerated. If the lender cannot refute this evidence, the case will be dismissed as “time barred,” and the lender will not be able to bring another action under the same facts.
The burden of proof requires that the complaint contains evidence on its face that the action is time barred; That the defendant, i.e., the borrower, did not waive the statute of limitations, and That the “documentary” evidence annexed to the motion proves, as a matter of law, that there are no issues of fact to be decided.
Why Professional Legal Help Is Essential
Successfully navigating a statute of limitations defense requires sophisticated legal knowledge and careful documentation. Statutes of limitations in foreclosure actions in the State of New York are complex, subtle and difficult in that they are not just conceptually difficult but they have also gone through many technical, procedural and philosophical changes. Unlike statutes of limitations in other areas, the statute of limitations for foreclosures in the State of New York has great potential to be influential and decisive over how many foreclosure actions — especially those with long and messy histories — proceed….or do not proceed.
When facing a Foreclosure Complaint, having experienced legal representation can make the difference between losing your home and potentially gaining clear title to your property. The Law Offices of Ronald D. Weiss, P.C., located in Long Island, New York, has been helping homeowners navigate these complex foreclosure defenses since 1993.
Time Limits and Urgent Action Required
The foreclosure process moves quickly, and statute of limitations defenses must be raised promptly. An action for foreclosure based on non-payment of a mortgage installment on January 1, 2010 must be filed by January 1, 2016 or else it will be considered “time barred,” and the defaulting defendant can ask the court to dismiss the action.
For homeowners with foreclosure cases that have dragged on for years, or those facing new foreclosure actions on old defaults, the statute of limitations defense may provide a path to not just keeping their home, but owning it free and clear. However, mortgage lenders have tightened their procedures regarding the timeline of filing or re-filing foreclosure actions within the statute of limitations and putting safeguards in place to halt the statute of limitations whenever possible. However, there are still certain outliers among mortgage lenders who may be disorganized or may allow certain cases to slip through the cracks.
Your Path Forward
If you’re facing foreclosure in New York State, don’t assume all hope is lost. The statute of limitations defense represents one of the most powerful tools available to homeowners, potentially offering not just protection from foreclosure, but complete debt elimination. With the recent strengthening of these protections under New York law, now is the time to have your case evaluated by an experienced foreclosure defense attorney who can determine whether this powerful defense applies to your situation.
Remember, time is literally of the essence when it comes to statute of limitations defenses. The sooner you act, the better your chances of successfully protecting your home and your financial future. Don’t let this opportunity slip away – your home and your family’s security may depend on understanding and asserting your rights under New York’s foreclosure statute of limitations.