Years of false certifications backfired when the family tried to block foreclosure
Signed occupancy certifications kept Bank of America's reverse mortgage foreclosure alive - even though the borrower left the property 15 years earlier.
The Appellate Division, Second Department, ruled on October 7, 2026, that the borrower's son and daughter-in-law cannot invoke the statute of limitations to block the foreclosure. The court affirmed a Nassau County Supreme Court order from April 3, 2025, with all four justices concurring.
The loan dates to January 2008, when the borrower took out an adjustable rate note secured by a reverse mortgage on a property in Westbury, New York. Under the note, the full balance would come due immediately if the property stopped being her principal residence.
According to the decision, the borrower moved into a nursing home in September 2008 - barely eight months after the loan closed. Her son and daughter-in-law, who became the property's record owners, argued the move happened no later than December 2009 at the outside.
Either date would have started the six-year statute of limitations clock well before Bank of America filed the foreclosure action in 2023. On paper, the lender was years too late.
But here is the wrinkle. Each year from 2011 through 2019, annual occupancy certifications were sent to Bank of America - signed by the borrower herself - stating she still lived in the home. The son and daughter-in-law moved for summary judgment, asking the court to toss the case as time-barred.
The court applied equitable estoppel, where a party's own misconduct during the limitations period prevents them from using the time bar as a shield. Rather than sending the estoppel question to trial - the usual approach - the court found the evidence strong enough to decide it outright. The defendants' own admissions in their motion papers, paired with the occupancy certifications the plaintiff submitted in opposition, showed that the lender's delay was a direct result of misconduct during the limitations period.
Notably, the appellate court assumed without deciding that the statute of limitations had actually expired. It did not need to resolve that question because the estoppel finding disposed of the defense either way.
This is a slip opinion, uncorrected and subject to revision before publication in the Official Reports.
For reverse mortgage lenders and servicers, the takeaway is practical: occupancy certification programs are not just compliance paperwork. They are the mechanism that governs when the enforcement clock starts running - and when misconduct around those certifications surfaces, courts have tools to keep the case alive.
