New York has had one of the best foreclosure protection defenses across the country. Where tens of thousands or more homeowners have actually taken their mortgage lenders to court over foreclosure disputes and actually won.
Allowing many homeowners to keep the possession of their property for many years without any threat of foreclosure. Seemingly to some homeowners a good deal. However, many of the foreclosure filings that were dismissed by lenders in New York were the result of improper mortgage securitization issues.
While the homeowners remained in the property there were still clouds on the title. The mortgage lenders were blocked from foreclosure filings that were six years outside of the statute of limitations. If the homeowner knew to raise this defense, the foreclosure filing would be tossed out by the courts in New York.
Now, that is all about to change drastically from the ruling in Freedom Mortgage Corporation v. Engel. A problem for homeowners is that the court’s ruling applies retroactively to any foreclosure cases ongoing or still open to appeal at the time the decision was issued.
A threat of foreclosure to homeowners is that this decision changed the rules. The Court of Appeals found that voluntarily ending a foreclosure suit stops the clock on the six-year time limit — even if the homeowner is never notified.
As a result, there could be tens of thousands of homeowners impacted if not tremendously more. However, this may not all be a bad thing for homeowners which will be explained more later in this post.
Yes, going through a foreclosure situation is stressful and is indeed no fun causing many sleepless nights, worry, and frustration.
New York Foreclosure Six-Year Statute Of Limitations Defense
NY CPLR § 213 is the New York law that governs contracts and puts a six-year statute of limitations on lenders to start foreclosure filings. If the lenders didn’t start their foreclosure action within six years under this law they would be time-barred after a default due date from doing so.
This became the golden New York foreclosure defense. The homeowners representing themselves ProSe or through legal representation found flaws with the mortgage loans. Particularly, where the 2008 mortgage foreclosure crisis contained many improper mortgage securitization flaws and made it hard to prove the foreclosing lender actually had the proper paperwork to foreclose.
While mortgage lenders view this as a win to finally foreclose on homeowners that defaulted on mortgage loans. This can also be a reset for homeowners to finally clear up clouds on title. The mortgage lenders will still need to prove that they own the mortgage and with missing paperwork and improper mortgage securitization, this could be to the homeowners’ advantage.
Senate Bill S5160
The “New York Foreclosure Protection Bill” is a very powerful weapon as foreclosure defense. However, foreclosure defense strategies still need to properly address supporting issues and case laws to raise a lack of Standing in violations to Article 13 in Real Property Actions & Proceedings.
New York is in a crisis epidemic state of emergency where properties that are either in foreclosure or facing foreclosure exceed the populations of Buffalo, Rochester, and Syracuse combined!!