A Hicksville property just outlasted one of the biggest lenders in the game
Deutsche Bank just lost a nearly two-decade fight over a Hicksville mortgage - and New York's foreclosure clock is the reason.
A New York appeals court on September 30 affirmed the dismissal of Deutsche Bank National Trust Company's foreclosure action against a Long Island property, ruling the case was time-barred under the state's Foreclosure Abuse Prevention Act.
The mortgage dates to June 2005, when the original borrower signed a note secured by property in Hicksville, Nassau County. The note was endorsed in blank and delivered to Deutsche Bank, which received a formal assignment in November 2009.
That same month, Deutsche Bank filed its first foreclosure, accelerating the full debt. In New York, a lender who calls the entire balance due starts a six-year countdown to enforce.
Nothing happened. In December 2017, the court granted Deutsche Bank's request to voluntarily discontinue. Under the Court of Appeals' ruling, walking away from a foreclosure could reverse the acceleration and restart the clock - a strategy lenders across the state relied on.
Meanwhile, the property changed hands twice. The borrower deeded it to IPA Asset Management, LLC (IPA) in December 2016 - though not recorded until November 2019 - and IPA transferred it to 8IN, LLC in April 2021.
IPA also filed a quiet title action in November 2019, trying to wipe the mortgage off the records. Deutsche Bank fought that and won. A March 2022 order found under Engel that the discontinuance had validly reversed the acceleration, keeping the mortgage alive.
Then FAPA changed the rules.
New York's Foreclosure Abuse Prevention Act (FAPA), effective December 30, 2022, states that voluntarily discontinuing a foreclosure does not "waive, postpone, cancel, toll, extend, revive or reset" the limitations period. The Engel reset strategy was dead.
When Deutsche Bank filed this second foreclosure in May 2023, 8IN, LLC moved to dismiss. The acceleration happened in December 2009. The new suit came more than 13 years later. The six-year window had long closed.
Deutsche Bank argued the March 2022 ruling should bind the court, and that applying FAPA retroactively violated the US and New York constitutions. The Appellate Division, Second Department rejected both, citing Court of Appeals decisions upholding FAPA's retroactive reach.
For servicers still holding files where an older action was discontinued pre-FAPA, the math is blunt: if the original acceleration is more than six years old, that file may already be dead.
