The court decision, supporters of the new law said, was that courts throughout the state were bombarded with a flurry of motions made by lenders to reopen foreclosure cases that had been dismissed years ago on statute of limitations grounds.Īs a result, foreclosure actions were no longer time-barred and countless homeowners were trapped “in a state of judicial purgatory with the fate of their homes suspended in incertitude," said supporters, who added that the process left some homeowners in foreclosure for more than a decade and that a disproportionate number of them happened in minority communities. Some legislators said the decision gave mortgage lenders and their servicers the ability to “unilaterally manipulate, arrest, stop, and restart the limitations period at will,” to the detriment of New York homeowners dealing with foreclosure actions. vs Engel case, which allowed lenders to voluntarily pause the state’s six-year statute of limitations countdown on foreclosures and reserve the right to restart the action again as long as it was done within six years. The issue arose out of a 2021 New York appeals court decision in the Freedom Mortgage Corp. Lawmakers, who passed the legislation by a large margin in May, said the aim is to eliminate abusive and unlawful litigation tactics in mortgage foreclosure actions that manipulate the law and the courts in favor of mortgage bankers and servicers. James Sanders, whose own home has been in foreclosure for 10 years, will put a hard six-year statute of limitations on foreclosure proceedings. The Foreclosure Abuse Prevention Act, sponsored by state Sen. Kathy Hochul has signed a controversial mortgage foreclosure protection act into law - surprisingly to some - without amendments that had been lobbied for by members of the lending industry.Ī spokesman for the governor’s office confirmed Tuesday that Hochul had signed the bill but did not respond to questions about the reason for the delay or her decision not to press for amendments.
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