New Jersey Courts retroactively applies Fair Foreclosure Act: Upholds Statute of Limitations


15-4- 9718 Anim Inv. Co. v. Shaloub, N.J. Super. Chan. (Jerejian, J.S.C.) (13 pp.) Defendants borrowed $178,000 from Mina Investment Co. in September 1990, executing a mortgage in favor of MERS as nominee for Mina the same day. Defendants defaulted on the mortgage in November 1990.

The mortgage was assigned to plaintiff in 1997. Notice of intent to foreclose was sent by plaintiff’s servicer in February 2015. Suit was commenced in September 2015. Defendants moved for summary judgment in February 2016. Both parties assumed that the case was governed by N.J.S.A. 2A:50-56.1(c), which provided that an action to foreclose a residential mortgage could not be commenced after 20 years from the date on which the mortgagor defaulted.

Based on that assumption, plaintiff argued that the date of default was the maturity date stated in the mortgage – Oct. 1, 1995 – and that the running of the statute of limitations commenced on the maturity date, providing it until Oct. 1, 2015, to file timely a complaint. Defendants argued that the date of default was Nov. 1, 1990, the date they failed to make their first monthly payment and, accordingly, the running of the statute of limitations commenced on Nov. 21, 1990, 20 days after they failed to make their first monthly payment, resulting in the expiration of statute of limitations on November 22, 2010.


The court found that N.J.S.A. 2A:50-56.1 of the Fair Foreclosure Act, which took effect on Aug. 6, 2009, applied retroactively to this action. It then found that N.J.S.A. 2A:50-56.1(a) was applicable and under that provision, the statute of limitations was triggered by the date fixed for making of the last payment or the maturity date, i.e., Oct. 1, 1995. Thus, applying the plain language of the limitations period described in subsection (a), an action to foreclose on the mortgage at issue was timely if commenced no later than six years from Oct. 1, 1995. Because the complaint was filed after the running of the six-year statute of limitations pursuant to N.J.S.A. 2A:50-56.1(a), the court found that it was untimely and plaintiff was time-barred from filing a foreclosure complaint. Therefore, the court granted defendants’ motion. [Filed June 30, 2016]

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