Interesting NY Decision on Acceleration: U.S. Bank N.A. v. Gordon, 176 A.D.3d 1006 (2d Dept. 2019)

 “failure to pay this delinquency, plus additional payments and fees that may become due, will result in the acceleration of your Mortgage Note. Once acceleration has occurred, a foreclosure action . . . may be initiated.”

the Notice of Default stated that “[t]o avoid the possibility of acceleration,” Defendants were required to make certain payments by a specific time, or ASC “will proceed to automatically accelerate your loan.” (Emphasis added).

see https://www.jdsupra.com/legalnews/ny-appellate-court-holds-default-letter-29981/

So it seems that in New York a notice of intention to accelerate or any notice that says that the supposed “lender” will accelerate is not the same as an actual acceleration. Actually that makes sense because any other interpretation would defy the intent of the notice of default. the notice of default is for the purpose of giving the borrower notice that unless they bring their payments up to date, the entire loan will become due.

The inherent logical and legal problem with this decision is that it is inconsistent with Florida (see Bartram case) and other states who made decisions as to implied “deceleration” for purposes of evading the effects of the statute of limitation. In fact, this very decision uses such “logic” to arrive at the conclusion that the “lender” is not barred because there was no acceleration. There was only an expression of an intent to do so. therefore any claims arising from acceleration could not arise.

In short the courts are speaking out multiple sides of their mouths.

On the one hand they say that deceleration which has never been claimed or noticed occurs upon the rendition of an order dismissing a defective foreclosure action and that the statute of limitations does not run on the balance where the “lender” has  given “notice” that it is intending to accelerate. The courts have thus “interpreted” a legal fiction into practical existence contrary to the rules of law. The acceleration is rendered void upon losing in court. There are various possible criticisms of such doctrine but the best one I think is “nuts.”

On another hand (or mouth) they are approving of “interpretation” of a notice of default declaring an intent to accelerate as actual being the acceleration for purposes of foreclosure. This is also crazy. If the notice of intention to accelerate was the actual acceleration then the notice would be fatally defective pursuant to paragraph 22 — which requires notice of default and an opportunity to cure it without paying the whole balance. So “intent to accelerate” cannot be the same as declaring acceleration since it would violate both law and contact. yet there it is in most courts where the “intent” is sufficient (according to most judges) to be an actual declaration of acceleration.

And still on another hand (or mouth) they are saying that acceleration does not occur where the lender declares only an intent to accelerate. This again is insane in the context of the foregoing “doctrines” imposed by the courts.

And of course the declaration of intent is contained in a “notice of default” that is a complete legal nullity, to wit: it is declared on behalf of U.S. Bank and a trust neither of which have any interest in the loan.

In short, the courts are willing to bend every rule, break any logical flow, and divert every rule in order to rule in favor of nonentities just like this case. U.S. Bank had no right, title or interest in the loan, debt, note or mortgage and neither suffered any financial loss for nor was it exposed to any default  declared or otherwise. And neither did any entity supposedly or presumably represented by U.S. Bank.

Note that acceleration can be accomplished through filing of a lawsuit where acceleration is declared. But in nonjudicial states, this is not possible if nonjudicial foreclosure is pursued.

9 Responses

  1. The more horror stories I hear…it makes my stomach sick. I cannot believe our legislators allow these “punks, thugs” a pass to injure society. Gotta wonder what kind of politicians and judges we have. Of course most politicians are lawyers. That explains a lot!

  2. Poppy – meant NO modification, NO bankruptcy – nothing. Sorry – left out the “NO.”

  3. Oh — and Poppy — just so you know — I have had modification, no bankruptcy — nothing since the long ago last refinance. I believe the inside “acceleration” was timed to refinances without ever disclosing to borrower.

  4. Poppy — over many years I have learned that my long ago “refinances” did not pay off the prior loan BY ME.

    Oddly, I was notified of “acceleration” and fees by inclusion in a class action several years ago. I never received any notice of acceleration. Never received notice of fees owed until went to last servicer. Was recently told these fees were allowed by foreclosure – but I have never been in foreclosure, and have never missed a payment since purchase of home many years ago.

    So — it has been my “crusade” to find out how this could have happened. No one will help. It is my conclusion that all of the non-bank “loans” were done in the same manner. A high official did say to me — “You can prove that your loan was never in default, but can you prove that all the others were not really in default?” I took this at it’s face for exactly what it says.

    When we think back to the crisis disclosed — we know the government needed to move and move fast. Not just for the markets but because of what would be disclosed.

    And – early payment defaults (EPD) — impossible that all these people that refinanced missed first payment. But, that is what was reported – high EPD rate. I have that problem too — only I also have proof of that payment too.

    I got lucky having the proof of payment of all, but it did not do me any good. I have been ignored, and I still battle my crusade today.

    Happy Thanksgiving to all.

  5. ANON, I am very interested in what you have to say about the “acceleration” and how they could pull an acceleration off, prior to signage. No sarcasm…very troubling behavior.

  6. In my sons case the servicer stated will and shall and they actually foreclosed and attempted to sale at auction but canceled due to letters from Ryan and the court SMJ his SOL case.
    Sorry one letter said we have accellerated and the judge still SMJ.

  7. Loans were “accelerated” but without notice to the borrower – before anyone signed on the dotted line.

  8. This what I had to say about the acceleration. Excerpts from my case:

    The acceleration and default is barred by Res Judicata, under Rule 41(a).
    Rule 41(a) operates on an adjudicated matter on the merits, barring the defendant’s from “multiple” claims that originate with the same foreclosure. Re: Beasley, June 2, 2015. Affidavit of Default, recorded 17 February 2009, Pender County. Wheel Estate Corp. v. Webb, 139 Ariz. 506, 508 (App. 1983) (cause of action accrues when a holder exercises option to accelerate). Where, the commencement of foreclosure likewise operates as an affirmative act of acceleration. Prevo v. McGinnis, 142 Ariz. 298, 302 (App. 1984) (citing Barnett v. Hitching Post Lodge, Inc., 101 Ariz. 488 (1966)).

    Dishonor: § 3-118. STATUTE OF LIMITATIONS) Notice of dishonor-Three (3) years for debt collection or 720 days, See: in prospectus…or the loan becomes a liquidated loan, where the Trust has no further interest. (e), an action to enforce the obligation of a party to pay a note payable at a definite time, (“the acceleration”, after a voluntary dismissal in 2009, “parties are set back to their original position”, the default of 2008), an action must be commenced within six years after the due date or dates stated in the note or, if a due date is accelerated, within six years after the accelerated due date. (After 2 dismissals in 2011, and one in 2012, and then failure to appear until December 2015, the debt was barred (this only works if the Original Note, was not used to pay Mortgage Guaranty Insurance, the Note would be VOID, and would not evidence a debt, [remember the Lost Affidavit of 2009] a Modification is not a “BEARER INSTRUMENT”, the Modification is an unsecured debt “deleted or liquidated” from the Trust, that the CSMC Trust has no interest in)). [emphasis added]

    Then no servicer can actually attest to what happened prior to them servicing the debt. In my case New Century books and records were all contaminated, when the court was relying on them.

    A judgment of strict foreclosure, when it becomes absolute and all rights of redemption are cut off, constitutes an appropriation of the mortgaged property to satisfy the mortgage debt.” Ocwen Federal Bank, FSB v. Charles, 898 A.2d 197, 204 (Conn. App. Ct. 2006)  National City Mortgage Co. v. Stoecker, 92 Conn. App. 787, 793, 888 A.2d 95, cert. denied, 277 Conn. 925, 895 A.2d 799 (2006); see Farmers Mechanics Bank v. Kneller, 40 Conn. App. 115, 124, 670 A.2d 324 (1996).

  9. Been there. Done it. I received a letter from BOA stating that they “will” accelerate my loan if I did not pay the arrears. That’s when I was instructed by BOA to contact them regarding a loan modification in which I was denied from there four times! By time this was all said and done, my arrears accrued higher and higher. Once the NYS mandated conferences were over, BOA filed a FULL claim with FHA and received FULL payment (this the original loan was paid in full). HUD then SOLD my loan to RBS, a foreign bank. My loan was then sold two more times. US Bank used as the “cover” for GRA Legal Title Trust AND GMAT Legal Title Trust.
    GMAT then filed a whole new foreclosure. My loan was now no longer an FHA loan but now a conventional loan with a new loan number! At this point, the six year SOL was upon us and we fought in court regarding the SOL. The lawyer for GMAT stated that the loan was never accelerated BECAUSE: 1. It was decided that BOA did not have standing to foreclose, which they didn’t. 2. Infamous decisions by higher courts were battling the differences between the acceleration letters using the word “will” and not “shall”! BEWARE!
    I lost my house to the also infamous US Bank and their phony Trusts! It was all a sham and continues today!

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