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PLAINTIFF BANK’S ATTEMPT TO DE-ACCELERATE THE MORTGAGE JUST BEFORE THE STATUTE OF LIMITATIONS RAN WAS PROPERLY REJECTED (THIRD DEPT).

The Third Department, affirming the dismissal of the foreclosure action, held that the plaintiff bank’s attempt to de-accelerate the mortgage just before the statute of limitations ran was properly rejected:

As stated by the [2nd] Department, “acceleration notices must be clear and unambiguous to be valid and enforceable, . . . [and] de-acceleration notices must also be clear and unambiguous to be valid and enforceable” (Milone v US Bank N.A., 164 AD3d 145, 153 [2018] … ). Notably, in Milone, the Court cautioned against pretextual de-acceleration letters issued to avoid an impending statute of limitations. … [T]he [2nd] Department reasoned in Milone that “a de-acceleration letter is not pretextual if . . . it contains an express demand for monthly payments on the note, or, in the absence of such express demand, it is accompanied by copies of monthly invoices transmitted to the homeowner for installment payments” or other comparable evidence … .

… [P]laintiff’s purported de-acceleration letter was issued on the eve of the expiration of the statute of limitations. Although the letter expressly “reinstates the [l]oan as an installment loan,” it does not demand the resumption of monthly payments or provide monthly invoices for payment due. Instead, the letter specifies that defendant remained in default for failing to make the required monthly installment payments since November 1, 2008 and offers to discuss “a variety of homeowner’s assistance programs.” Not to be overlooked is that the March 2, 2016 letter was followed by two June 13, 2016 letters providing 30 days to cure the default by making a payment due of $101,831, as well as a 90-day notice required under RPAPL 1304 — a condition precedent to initiating a foreclosure action. In our view, this proffer does not constitute a valid de-acceleration, as plaintiff simply put defendant on notice of its obligation to cure an eight-year default and then promptly embarked on the notices required to initiate a second foreclosure action. It follows that plaintiff’s second action was properly dismissed as untimely. Wells Fargo Bank, N.A. v Portu, 2020 NY Slip Op 00025, Third Dept 1-2-20

 

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