New York Legislature Targets Lenders’ Right to Revoke Mortgage Acceleration


New York Senate Bill S5473D and its Legislative counterpart A7737B seek to overturn the well-reasoned decision of the New York Court of Appeals in Freedom Mtge. against Engel, 37 NY3d 1 (NY 2021), and retroactively revoke lenders’ longstanding right to revoke their option to accelerate post-default mortgages. If enacted, this so-called “Foreclosure Abuse Prevention Act” would represent a sea change from more than a century of well-established laws, likely accelerating gentrification and exacerbating New York’s housing crisis. by creating favorable conditions for property speculators to prey on, and take advantage of, vulnerable and distressed homeowners.

Mortgage Acceleration Act and Consequences

In New York, the six-year statute of limitations for enforcing a mortgage begins to run once the mortgage debt is accelerated, that is, when the borrower’s right and obligation to make monthly payments cease and all monies become immediately due and payable. Where acceleration is optional under the Note and Mortgage, “certain affirmative steps must be taken to evidence the Noteholder’s election to accelerate” (Albertina Realty Co. vs. Rosbro Realty258 NY 472, 476 (NY 1932)), for example, by suing for foreclosure.


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