Court Cancels Time-Barred Mortgage, Dismisses Foreclosure Action in Landmark Victory

January 7, 2025

Court Cancels Time-Barred Mortgage, Dismisses Foreclosure Action in Landmark Victory

In a significant victory for homeowners, Petroff Amshen LLP’s dedicated advocacy leads to the dismissal of a time-barred foreclosure action, the cancellation of a decades-old mortgage, and a strong defense of homeowner rights under New York law.

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A Queens County homeowner recently secured a decisive legal victory with the dismissal of a foreclosure action and cancellation of their mortgage. The case, resolved under New York’s Real Property Actions and Proceedings Law (RPAPL) §1501(4), highlights the proven experience and dedication of Petroff Amshen LLP in defending homeowners’ rights.

The dispute centered on a mortgage default dating back to 2005. The lender initially filed a foreclosure action in 2006, which was discontinued in 2023. In 2024, the lender attempted to revive the claim by filing a new foreclosure action based on the same default. Representing the homeowner, Petroff Amshen LLP argued that the six-year statute of limitations had expired, barring the claim. The court agreed, stating that the statutory timeline began when the loan was accelerated in 2006 and that discontinuing the earlier action did not reset the limitations period.

“This decision reaffirms that financial institutions cannot bypass the law or revive long-expired claims.”

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The lender also argued that the mortgage’s federal insurance granted immunity from New York’s statute of limitations. Petroff Amshen LLP refuted this argument, demonstrating that the loan’s insurance status did not exempt it from state law. The court clarified that immunity applies only to loans held by federal agencies, which was not the case here.

“This decision is a major victory for homeowners in New York,” said Serge F. Petroff, Founding Partner of Petroff Amshen LLP. “It reaffirms that financial institutions cannot bypass the law or revive long-expired claims. At Petroff Amshen LLP, we are proud to protect the rights of homeowners and ensure that they are not subjected to unjust foreclosure actions.”

The court dismissed the foreclosure action and canceled and discharged the mortgage, providing the homeowner with a clear title to their property. Petroff Amshen LLP’s client was additionally awarded attorneys’ fees as a result.