In Bank of New York Mellon v. Dieudonne, 2019 WL 1141973 (2d Dept. 2019), the Appellate Division, Second Department determined that a mortgage is accelerated by the filing of a complaint to foreclose the mortgage with an election to accelerate. This is true even though a provision in the mortgage preserves the borrower’s right to make installment payments rather than the full debt. Dieudonne will reverberate nationally and through New York.

In the throes of the Great Recession, many foreclosure actions were commenced and ultimately dismissed or abandoned. Among the causes were an overwhelming volume, fluctuating laws, and new regulatory requirements. Financial institutions are now seeking to foreclose those loans and finding that they are barred by the statute of limitations because those old lawsuits accelerated the mortgages years earlier. Courts are giving out free houses but not to homeowners—to real estate speculators who are paying pennies to the homeowner for the right to fight foreclosure.

Acceleration