Why New York lawmakers are worried about mortgage foreclosures
State lawmakers are calling for the passage of a bill meant to address a court ruling they fear could lead to more foreclosures in New York.
At issue is a Court of Appeals ruling this year that allows mortgage-lending banks in foreclosure actions to reset a six-year statute of limitations when determining voluntary discontinuance act as an acceleration of the debt. Banks would be the only plaintiffs in New York that are, in essence, barred from the statute of limitations in these cases.
The bill addressing the issue is backed by Sen. James Sanders and Assemblywoman Latrice Walker and would block banks from resetting the statute of limitations period with a voluntary discontinuance. And it would prevent banks from suing a homeowner for a money judgment when the mortgage has been determined to be time-barred.
And the measure would limit a bank from using the law to recommence a new action within six months of the statute of limitations expiring only once.
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