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Landmark New York Court of Appeals Decision Clarifying Calculation of Statute of Limitations in Mortgage Foreclosure Actions

The New York Court of Appeals reversed four Appellate Division decisions and decided in favor of the mortgagees in a consolidated decision issued on February 18, 2021, ruling, inter alia, that:

  • a demand letter which includes language that the debt "will be" accelerated expresses a possible future event and therefore does not constitute an unequivocal overt act which would accelerate the mortgage debt; 
  • a defective pleading which incorrectly references only the original terms of a loan – not the operative modification agreement – is insufficient to accelerate the mortgage debt;
  • a mortgagee's voluntary discontinuance of a foreclosure action is sufficient to revoke the acceleration created by the filing of that complaint; and
  • a mortgagee's motivation for the discontinuance and revocation of the acceleration is irrelevant to the Court's analysis.
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