Fannie Mae threw four arguments at the court and lost every one
A missed clock cost Fannie Mae a foreclosure case in the Bronx - not on the merits, but on timing.
New York’s Appellate Division, First Department, on October 22, 2026, unanimously affirmed the dismissal of Fannie Mae’s foreclosure action against a Bronx homeowner. The mortgage giant waited more than three years past a critical deadline before trying to lock in a default judgment.
The rule at the center is straightforward. Under CPLR 3215(c), if a defendant does not answer a complaint, the plaintiff has one year to move for a default judgment. Miss the window, and the court can toss the case. Fannie Mae served an amended complaint on the homeowner in September 2018. She did not answer. But Fannie Mae waited until October 2021 - more than three years - to ask the court to move things forward.
Fannie Mae blamed COVID-19. The court was not persuaded. The pandemic did not begin until March 2020, more than a year after the homeowner had already defaulted. The deadline had passed before the first lockdown.
From there, Fannie Mae switched tactics. It argued the amended complaint was substantively identical to the original, so no new answer was needed. The court rejected that - because Fannie Mae had already taken the opposite position in the same case, arguing earlier that the homeowner had defaulted by not answering the amended complaint. A party cannot flip its own argument mid-case because the first version did not work, the court said, citing the “well-settled principle”.
The court also found the homeowner had not given up her right to seek dismissal. Her only activity after the default was filing a COVID-19 hardship declaration in November 2021 - not enough to count as “active litigation of the action or participation in the action on the merits”.
Fannie Mae’s last argument involved CPLR 3408, which gives a homeowner who appears at a foreclosure settlement conference a 30-day window to file a late answer. The homeowner here never filed one. Her 2018 default was never vacated, and the trial court dismissed the case after that window closed.
For servicers and foreclosure teams in New York, the takeaway is plain: the one-year default judgment deadline under CPLR 3215(c) is not flexible. Miss it, and the case goes away.
This is a slip opinion. The decision is uncorrected and subject to revision before publication in the Official Reports.
