NY restricts lenders’ ability to reset statute of limitations on foreclosures

State Issues New York State Legislation Foreclosure Mortgages Mortgage Servicing Consumer Finance

In December, the New York governor signed A 7737-B, the “Foreclosure Abuse Prevention Act,” which amends the rights of parties in foreclosure actions. Among other things, the law provides that a lender or servicer’s voluntary discontinuance of a foreclosure action does not reset New York’s 6-year statute of limitations on foreclosures, according to New York CPLR §213. Further, pursuant to the new law, if an action to foreclose a mortgage or recover any part of the mortgage debt is time-barred, any other action seeking to foreclose the mortgage or recover the debt is also time-barred. The amendments are effective immediately and, notably, apply to all pending actions in which a final judgment of foreclosure and sale has not been enforced.