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NY-UCC §3-122 specifically provides that, for a time instrument, the statute of limitation accrues one day following the date of maturity and, for a demand instrument, the statute of limitation accrues on the date the instrument is executed or issued. These consequentially different accrual dates require an inquiry into whether, under the New York Uniform Commercial Code (the “Code”), a mortgage note under review is either a time instrument pursuant to subsection (c) of NY-UCC §3-109(1), a demand instrument pursuant to NY-UCC §3-108 or a hybrid instrument—i.e., a time instrument (pursuant to subsection (a) of NY-UCC §3-109(1)) that can be converted into a demand instrument. Central to this inquiry is NY-UCC §1-309 (formerly NY-UCC §1-208), the provision of the Code that defines what constitutes a permissible acceleration clause in a time instrument pursuant to subsection (c) of NY-UCC §3-109(1).

In reviewing a Fannie Mae form mortgage note and without regard to this important inquiry into whether said mortgage note is actually a time instrument pursuant to subsection (c) of NY-UCC §3-109(1), all four Appellate Division Departments have predetermined that the actual date of acceleration is the date the applicable statute of limitation accrues. Each Department has reviewed a letter sent by the mortgage noteholder to the debtor-in-default which provides that if the debtor fails to cure the default within thirty (30) days, then the debt “will be accelerated.” The First and Third Departments conclude that the letter is clear and unequivocal proof of actual acceleration. See Deutsche Bank Natl. Trust Co. v. Royal Blue Realty Holdings, 148 A.D.3d 529 (1st Dept 2017), lv. den. 30 N.Y.3d 960 (2017); Colonie Block & Supply Co., Inc. v. DH Overmyer Co., 35 A.D.2d 897 (3d Dept.1970). The Second and Fourth Departments conclude, however, said letter is a mere expression of a future intent that falls short of an actual acceleration. See Milone v. US Bank NA, 164 A.D.3d 145 (2d Dept. 2018); Ditech Financial v. Corbett, 166 A.D.3d 1568 (4th Dept. 2018).

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