Mortgage lenders, servicers and their counsel likely need not be reminded of the surfeit of cases dismissing foreclosure actions because the statute of limitations has run on the mortgage obligation. This causes affected plaintiffs to lament the seemingly anomalous situation of the borrower simply allowed to keep all the mortgage proceeds because some mishap caused the statute of limitations to expire. While sometimes the delay leading to such a draconian outcome may be attributable to the lender, on more than a few occasions it is not. Rather, the system imposes this under circumstances where many would find it more than dismaying, at least on the lender’s side. In any event, this is a pervasive aspect of mortgage foreclosure practice in New York.

There should be an awareness as well, though, of a savings provision contained in New York statutes, of which we are reminded both by a salutary twist in a new case, U.S. Bank Trust, N.A. as Trustee for LSF9 Master Participation Trust v. Moomy-Stevens, 167 A.D.3d 1380, 91 N.Y.S.3d 788 (3d Dept. 2018), as well as a particularly liberal interpretation of the statute expressed by the Court of Appeals in U.S. Bank, N.A. v. DLJ Mortgage Capital, Inc., 33 N.Y.3d 72, 122 N.E.3d 240, 98 N.Y.S.3d 523 (2019).

The Statute