State legislators are calling for legislation to reflect a court ruling they fear could lead to more foreclosures in New York.
This is a decision by the Court of Appeal this year that allows mortgage banks in foreclosure claims to nullify the six-year statute of limitations when determining voluntary termination as an acceleration in debt repayment. Banks would be the only plaintiffs in New York that are effectively deprived of statute of limitations in these cases.
A bill to tackle this problem, backed by Senator James Sanders and MP Latrice Walker, will prevent banks from changing the statute of limitations by voluntarily terminating it. And that would prevent banks from suing the homeowner for a monetary judgment when the mortgage was found to have expired.
And this measure will restrict the bank from using the law to renew the new action within six months after the expiration of the statute of limitations only once.
“Given the state of the economy during the COVID-19 pandemic and even before that, Southeast Queens suffered a flurry of foreclosures,” Sanders said. “The New York State Court of Appeals ruling earlier this year even worsened the situation by giving mortgage lenders an undue advantage over homeowners in litigation. My legislation would ensure a fair process in foreclosure cases and prevent many foreclosures. ”