The statute of limitations for mortgage foreclosures had never, in the past, been subject to much thought, as it was rarely successfully invoked. However, a confluence of events—the “Great Recession,” new court requirements, lengthy court delays, and new regulatory requirements—has made the statute of limitations suddenly important. More critically, mortgage lenders and servicers that have commenced a mortgage foreclosure action, and have discovered that they need to recommence a new foreclosure action, are grappling with how to turn back the clock on the statute of the limitations. This article discusses one such method of effectively extending the ability of a lender to foreclose on a mortgage whose statute of limitations for enforcement looms near—revocation of acceleration—and the legal uncertainty of such revocation of acceleration.
Statute of Limitations for Mortgage Foreclosures. Under New York law, the statute of limitations for commencement of an action based on the breach of a contract is six years.1 The statute of limitations does not start until the cause of action accrues and, with respect to contracts, the cause of action accrues at the time of the breach.2 Where the claim concerns the payment of money owed pursuant to the contract, the cause of action accrues when the claimant possesses a legal right to demand payment.3
