New York Appellate Division, Second Dept.
Foreclosure/Acceleration/Limitations. Lender filed an action to foreclose a mortgage in 2006.  Thereafter, a judicial hearing officer (traverse) determined that borrower was not served properly and the parties entered into a stipulation discontinuing the action.  One year later, lender filed to foreclose again, but discontinued that action in 2013.  Lender then assigned the note and mortgage.  New lender sought to vacate the 2007 discontinuance but withdrew the motion one month later.  5 months later, new lender filed a new foreclosure.  Borrower included as one of its affirmative defenses, a claim that the action was barred by the statute of limitations.  New lender moved for summary judgment, borrower cross-moved, and the court found for borrower.  However, the court gave lender and equitable mortgage against the premises.  On appeal, the Court sustained for borrower - “An action to foreclose a mortgage is subject to a six-year statute of limitations (see CPLR 213[4]; NMNT Realty Corp. v Knoxville 2012 Trust, 151 AD3d 1068, 1069). ‘[E]ven if a mortgage is payable in installments, once a mortgage debt is accelerated, the entire amount is due and the Statute of Limitations begins to run on the entire debt’(Kashipour v Wilmington Sav. Fund Socy., FSB, 144 AD3d 985, 986, quoting EMC Mtge. Corp. v Patella, 279 AD2d 604, 605; see Lubonty v U.S. Bank N.A., 159 AD3d 962, lv granted ‘ NY3d, 2018 NY Slip Op 083111 [2018]).  RPAPL 1501(4) provides that ‘[w]here the period allowed by the applicable statute of limitation for the commencement of an action to foreclose a mortgage . . . has expired," any person with an estate or interest in the property may maintain an action ‘to secure the cancellation and discharge of record of such encumbrance, and to adjudge the estate or interest of the plaintiff in such real property to be free therefrom’ (see Mizrahi v US Bank, N.A., 156 AD3d 617, 618).” As far as the equitable mortgage, the Court reversed – “In any event, the doctrine of equitable mortgage is inapplicable to the circumstances of this case, where a legal written mortgage existed (see Payne v Wilson, 74 NY 348, 351; Allen v Union Fed. Mtge. Corp., 204 F Supp 2d 543, 546 [ED [*3]NY]).” 21st Mtge. Corp. v Nweke, 2018 NY Slip Op 06509, Appellate Division, Second Department, October 3, 2018