U.S. Bank Trust N.A., as Trustee v. Roberta Chambers
Attorneys and Parties
Brief Summary
Residential mortgage foreclosure—when the six-year statute of limitations runs after acceleration and whether a Home Affordable Modification Program (HAMP) modification and subsequent payments reset the limitations period.
The action was time-barred because the mortgage debt was deemed accelerated as of the borrower’s last payment date in 2008; the 2016 modification did not affect the limitations period.
The order granting the borrower’s motion to dismiss as time-barred; the complaint was reinstated.
Acceleration occurred when the 2014 foreclosure action was commenced, not in 2008; the 2016 HAMP modification and subsequent installment payments constituted a written acknowledgment and promise to pay, restarting the limitations period under General Obligations Law § 17-105 [written acknowledgment or promise to pay a mortgage debt restarts the statute of limitations], making the 2023 action timely under CPLR 213(4) [six-year statute of limitations for mortgage foreclosure actions].
Background
In 2007, Roberta Chambers executed a $317,496 note and mortgage with Wells Fargo Bank, N.A., later assigned to MTGLQ Investors, L.P. After an alleged default, MTGLQ filed a foreclosure in 2014. That action was dismissed in 2016 for failure to prosecute (22 NYCRR 202.27 [dismissal for failure to prosecute]). Weeks later, Chambers and Rushmore Loan Management Services, LLC (servicer for MTGLQ) executed a permanent HAMP modification. Chambers made payments for a time, then allegedly defaulted again. The mortgage was subsequently assigned to various entities, ultimately to U.S. Bank Trust N.A. in 2022. The present foreclosure was filed in July 2023. Chambers moved to dismiss as time-barred, asserting the loan was accelerated in 2008 and never de-accelerated. The bank argued the 2016 modification and payments reset the statute of limitations.
Lower Court Decision
Supreme Court (Jose-Decker, J.) granted Chambers’ motion, reasoning that the mortgage debt accelerated in 2008 based on the complaint’s reference to no payments since September 1, 2008, rendering the 2023 foreclosure untimely notwithstanding the 2016 modification.
Appellate Division Reversal
The Appellate Division held that acceleration requires evidence of an election to accelerate, which occurred with the commencement of the 2014 foreclosure, not in 2008. The court noted the 2014 complaint expressly elected to accelerate and referenced RPAPL 1304 [mandatory 90-day pre-foreclosure notice] as a condition precedent. Thus, the six-year limitations period under CPLR 213(4) [six-year statute of limitations for mortgage foreclosure actions] began in 2014. The 2016 HAMP modification—within six years of acceleration—reaffirmed the debt, and Chambers’ subsequent payments constituted an absolute and unqualified acknowledgment of the debt and promise to pay, restarting the limitations period under General Obligations Law § 17-105 [written acknowledgment or promise to pay a mortgage debt restarts the statute of limitations]. Accordingly, the July 2023 action was timely. The court rejected Chambers’ unpreserved evidentiary challenge to payment records and remitted for further proceedings.
Legal Significance
Clarifies that a borrower’s last payment/default date does not, by itself, establish acceleration; the limitations clock begins upon an unequivocal acceleration (e.g., filing the foreclosure complaint). Confirms that a HAMP modification and subsequent installment payments can restart the statute of limitations as a written acknowledgment and promise to pay under General Obligations Law § 17-105, allowing later foreclosure actions to be timely even after an earlier acceleration.
In New York mortgage foreclosures, acceleration is triggered by an unequivocal act like filing suit, and a subsequent HAMP modification and payments can restart the six-year limitations period, rendering a later foreclosure timely.