Our mortgage servicing client commenced a second foreclosure action in 2017 after its first 2008 action failed. When the Borrowers claimed that the mortgage had been accelerated by the 2008 action and could not be enforced under the 6-year statute of limitations, the servicer turned to Adam Leitman Bailey, P.C. to save the mortgage loan.
Borrowers made a pre-answer motion to dismiss under the statute of limitations. ALBPC opposed Borrowers’ motion on a number of grounds including that by the terms of the mortgage, Borrowers had the ability to reinstate the loan up until a judgment was entered. Therefore, since there was no prior judgment, the loan had never actually been accelerated and the statute of limitations had not expired.
The Court agreed and denied Borrowers’ motion to dismiss. The Court completely adopted ALBPC’s argument that there could not have been acceleration of the whole debt because of the Borrowers’ right to reinstate.
This acceleration argument, known within the NY mortgage servicing industry as the “MacPherson Argument,” is a hot button issue in New York law. There is no appellate guidance and the Justices of the lower courts are divided. ALBPC is at the forefront of the “MacPherson Argument,” and continues to push this argument in all courthouses to protect servicers and lenders from having mortgages discharged under the 6-year New York statute of limitations.
Danny Ramrattan, Esq. and another attorney of the Real Estate Litigation Group at Adam Leitman Bailey, P.C. secured this victory for the Lender.