DS News - Bank of America

89 Special Legal Report the court set out three factors: » 1. Letter Contains Express Demand for Monthly Payments on the Note; » 2. Letter is Accompanied by Monthly Invoices for Regular Installment Payments; » 3. Other Evidence that Lender Truly Intended to De-accelerate the loan. e Milone Court went on to state that a "bare" and conclusory de-acceleration letter, without a demand for monthly payments, copies of invoices, or other evidence, may raise legitimate questions about whether or not the letter was sent as a mere pretext to avoid the statute of limitations and would not be a valid de-acceleration letter. I recommend that a deceleration letter specifically notify the borrower the acceleration is revoked, the loan is payable by its original terms as a monthly installment contract, demand the borrower resume making monthly payments, and set out the due date, the monthly payment amount, and the amount needed to reinstate. On February 26, 2020, in Nationstar Mortgage LLC v. Dorsin, the 2nd Dept. Appellate Court rejected the plaintiff 's argument that the borrower's execution of a HAMP trial plan was an acknowledgment of the debt that revoked acceleration and dismissed the foreclosure for an expired statute of limitations. e court reasoned that the borrower "merely agreed to make three trial payments so as to receive a permanent modification offer and any intention to repay the debt was conditioned on the parties reaching a permanent modification agreement, which did not occur." e Appellate Court found the HAMP trial plan did not revoke acceleration because it was not a sufficient acknowledgment of the debt and an unconditional promise to repay. e 2nd Dept. also found the three timely trial period plan payments were not an absolute and unqualified acknowledgement of the debt by the borrower from which a promise to pay the remainder could be inferred because the trial payments were made for the purpose of a loan modification rather than payment of the loan at current terms. e 2nd Dept. noted that its decision is inconsistent with the 3rd Dept.'s decision in Wells Fargo Bank N.A. v. Grover, which the court found HAMP trial plan payments "constituted an unqualified acknowledgement of the debt that more was due and from which a promise could be inferred to pay the balance." By creating such an obvious split in appellate department case law, the 2nd Dept. set up the issue to be appealed to the Court of Appeals. Unless that happens, the law on whether HAMP trial plan payments revokes acceleration differs depending on where in the state the issue is litigated. Commencing a foreclosure action on a loan that was accelerated over six years ago, if the acceleration was not revoked within the six-year limitations period, the statute of limitations was not tolled by bankruptcy or death of an owner, or re-set by the borrower acknowledging the debt or making voluntary payments is a violation of the FDCPA and New York law. A foreclosure filed after the statute of limitations expired is a violation of the Fair Debt Collection Practices Act because it is an attempt to recover an unenforceable debt under state law and the named plaintiff, servicer, and law firm could be sued for the FDCPA violation. Additionally, under New York law, plaintiffs in a foreclosure action must file a certificate of merit in which the plaintiff 's attorney certifies that they reviewed the facts of the case with a representative of the plaintiff and there is a reasonable basis to commence the action. If the statute of limitations has expired, then there is no reasonable basis to commence the foreclosure. Adam Gross is licensed to practice in New York and is the Founding Partner at the New York & New Jersey based law firm of Gross Polowy, LLC. Gross is the critical source of thought leadership, which Gross Polowy has become known for. He plays an important role in identifying areas where clients of Gross Polowy are in need of solutions, or a product or process that might not yet exist. Gross has over 27 years' of legal expertise in the nuances of New York real property laws, and is uniquely known for his thought leadership and pragmatic approach surrounding areas such as: mortgage servicing regulations, mortgage foreclosures, statute of limitations issues, and the business conduct rules for servicing mortgage loans. By creating such an obvious split in appellate department case law, the 2nd Dept. set up the issue to be appealed to the Court of Appeals.

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