A decision has been rendered by the Court of Appeals in the matter of Freedom Mortgage Corporation v Engel. This decision has implications for high risk statute of limitation assets. Its impact will be far-reaching, and an unequivocal win for the foreclosure plaintiff’s bar and servicers and lenders who regularly deal in New York defaults. The decision can essentially be summarized into three distinct holdings: (1) A voluntary discontinuance, in and of itself, acts as a de-acceleration of the debt absent an affirmative statement by the lender to the contrary, (2) The failure to reference the correct loan documents in a summons and complaint will result in an invalid acceleration, which is incapable of beginning the statute of limitations clock, (3) The use of the language “will accelerate” in a default notice does not itself accelerate the debt as advocated and previously found by the first department in Deutsche Bank Natl. Trust Co. v Royal Blue Holdings, 148 AD3d 529(1st Dept 2017).
We can anticipate both plaintiff’s bar and defendant’s bar carefully reviewing this 33-page decision to support and distinguish their respective cases. For any questions regarding this case, or its impact, please contact Richard O’Brien, Esq. (firstname.lastname@example.org) or Deborah Gallo, Director of Operations (email@example.com).