Quiet Title Actions Based Upon Expiration of Time to Foreclose

In a previous post we discussed the New York Mortgage Foreclosure Statute of Limitations, under which the owner of a mortgage loan has up to six years from the date that a mortgage is accelerated to file a foreclosure action.

When a mortgage is accelerated, all past, present and future payments of principal and interest become immediately due and payable and can be recovered from the homeowner through a foreclosure action. Acceleration of a mortgage occurs either when a mortgage foreclosure action is filed, or less commonly, when a “notice of acceleration” stating that the mortgage has been accelerated is mailed to the homeowner.

Six years after a mortgage is accelerated, the time to file a mortgage foreclosure action expires (with occasional exceptions).   If the bank has not won a judgment of foreclosure and no mortgage foreclosure action is pending at that time, the homeowner may file a quiet title action to discharge (remove) the mortgage lien from the property.  For example, as of today November 6, 2015, a homeowner may sue for quiet title if a foreclosure action was commenced (or a notice of acceleration was mailed) any time before November 6, 2009.  One year from today, mortgages accelerated before November 6, 2010 will be dischargeable through quiet title actions.  And so on.

When a homeowner wins quiet title, the property can be sold without paying the mortgage debt. The homeowner keeps the sales proceeds instead of the bank.  Debt Inversion accomplished.

If the time to foreclose upon your mortgage has expired, no judgment of foreclosure has been awarded, and no mortgage foreclosure action is currently pending, it is important to consult with an attorney experienced in mortgage litigation to determine whether you have a valid quiet title claim.

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