BONY Mellon Crashes on Statute of Limitations in NY

While this case could have the effect of barring all those cases that are over 6 years old (NY Statute) where acceleration occurred, it does nothing in those jurisdictions like Florida that have twisted logic to create a virtual deceleration allowing the statute of limitations to continue running.

The logic and precedent cited by this NY court, Appellate Division, is basically what the rule has always been until in recent foreclosure cases, courts in other jurisdictions bent over backward to find ways to allow foreclosures to proceed even though the purported claimant failed to file until after the statute of limitations had run. Such actions were always considered to be time-barred which was supported by several doctrines. Now there is conflict.

The number of cases in which the statute of limitations is an issue has skyrocketed. Why?

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see BONY Loses SOL Case in NY

also article: new york law journal/2019/03/20/mortgage-acceleration-and-statute-of-limitations

I’m one of the few people who, at age 72 and having practiced law for 42+ years, and who previously worked in commercial and investment banking, asks why any institution would wait after a default for 5, 6 even 10 years to file a foreclosure complaint. When I started practicing law any bank officer who failed to bring such a claim would risk termination of employment. That is still true for those banks who were the lender and still are.

After 13 years of research and analysis of this subject I have arrived at the following conclusions:

  • Most foreclosures today involve a claim on behalf of a party who will not receive the benefit of winning (and doesn’t care). For reasons unique to foreclosure cases this does not bar the named claimant as having lack of standing. No assertion is made that the claimed “assignee” or the claimed “successor beneficiary” will ever receive the money and they never do.
  • If there was an undisputed creditor to whom the debt was owed and that creditor had rights assigned to it under an assignment of mortgage and indorsement of promissory note, then there would be no delays. What creditor would wait 6 years before attempting to collect? Before the era of false claims of securitization, foreclosures were not barred by the statute of limitations because the situation didn’t come up. A bank has a duty to expeditiously enforce its claim for payment. Foreclosure actions that were barred by the statute of limitations were extremely rare birds.
  • There are two primary reasons for extended delays in initiating foreclosures in nonjudicial and judicial states:
    • First, the investment banker who started a securitization scheme is allowing its tacit partner, the alleged “Master Servicer”, to accumulate claims of servicer advances until the equity in the property has been used up.  This claim solely arises by labeling payments made to investors as “Servicer Advances” despite the fact that such payments come from the investors’ funds and not from the servicer and are thus not advances. So the proceeds of the sale of foreclosed property go to the so-called “Master Servicer” and not the party named as claimant.
    • Second, knowing that the paperwork in a specific case is already subject to scrutiny for forgery etc., the playbook calls for waiting, to wear the homeowner down, and then introducing new paperwork to correct the obviously defective fake paperwork.
  • BONY/Mellon, as in the case that is cited in the link above, is not acting as Trustee of anything, and is not a claimant in its own right. Further it is not going to receive the benefit of any foreclosure. Someone else will receive that benefit and that party will not be a creditor. So in the remote jungles of Wall Street decisions are made by persons who represent parties that will never be disclosed, none of whom are creditors at the time of foreclosure because the debt was previously further distributed amongst dozens of investors who have no direct claim on the debt, note or mortgage. The use of the BONY name is a ruse. They have nothing to do with the loan.
  • The implied trusts and investors don’t have a claim, so someone needs to be drafted or appointed to take the position of claimant, even if that is a false representation to a court. Neither the trust nor any holder of a certificate has any ownership interest in the debt, note or mortgage. If they don’t own the debt then they can’t enforce the mortgage. But it is getting harder to get people to signing documents that they know expose the signor to criminal liability, even though nobody except Brown at DOCX has been prosecuted so far.
  • So an important reason for such delays is that in cases where the false underbelly of illegal foreclosures can be easily exposed, the banks have chosen to wait it out while they get hundreds of thousands of foreclosure sales by default. This helps to cement the impression that the certificates issued in the name of nonexistent trusts actually have a value, encourages investors to buy more certificates and prevents investors from making claims for fraud, thus collapsing some large portion of the shadow banking market.

4 Responses

  1. DeutscheBank was the end of the line entity that foreclosed on us. Bank of America supposedly held the loan. They all waited 9 years to start the foreclosure, and DeutscheBank was the supposed “Trustee” of the Morgan Stanley Trust that held our loan at the time of foreclosure in August 2016. We wondered how come it took them so long. And yes, they ran the “fees” up until we owed almost twice what the loan debt was $ 189K and it sure was an amount that was way over our equity too. What was interesting was the county tax value of the house was $ 112K. The “auction” price that the forecloser purchased and took the property for itself at the “auction” (by previous submitted written and undisclosed bids to the Clerk of Court, which are not made public except for the WINNING bid amount) was approximately $ 114K. Then it was sold to a third party, a house flipper, for $ 76,100 (he fixed it up and re-sold it to new owners for $ 126K). WE ourselves could have made payments even at the exorbitant adjusting interest rate which was up to 10.75 % on the balance of $ 76,100 if the bank would have let US have that write-down. But no, we would have had to come up with either the lump-sum of the run-up loan balance with all the bogus fees and accrued interest, at $ 189K loan balance, or alternative financing of it, which of course no one would do for us. Not even for a payoff offer made to us during the process by the Servicer – SPS Servicing, of $ 66K, which we could have paid a lender back for, if financed, as we both had enough in dependable Social Security income by that time to do it and live on too. But we had no savings or other retirement money left to pay even that $ 66K with as the lump sum amount that SPS Servicing required. They probably KNEW that before they made us that offer (in writing). So obviously there is a need for the lenders or the Trust or whoever has any ability to claim any status over the loan to have the house RESOLD out of the original loan debtors to a NEW owner, a NEW title holder. That should prove to us all including the lawyers and the judiciary that there IS something rotten in Denmark about the whole thing. If not, then my assumption is the judiciary from top to bottom and at the highest levels of our government HAVE to all be in on it and probably are receiving kickbacks. So why can’t we prove THAT and take them down? Why are there no lawyers with enough honesty and toughness in our state to take that fight on? One by one per each homeowner who can pay to fight is not ever going to fix it, and the majority of us are still going to have been robbed of our homes.

  2. Yep, Second Dept. nailed it again. See also Bank of New York v. Silverberg and also Silverberg v. Bank of New York.

  3. I always wondered about this. When a homeowner uses goes for a defense the court bends over backwards and cited SOL even though fraud upon the court has no statute of limitation yet it seems the banksters et al get no limitation for the time they drag homeowners in court over and over and over again

  4. My loan made February 18, 2005, REMIC terminated January 20, 2006 with SEC (have Certified Copy-SEC).
    Foreclosure December 2, 2014, in name of REMIC.
    New York Mellon’s REMIC.

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