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On December 30, 2022, New York Governor Kathy Hochul signed into law the Foreclosure Abuse Prevention Act (FAPA) after the bill’s passage by both the New York state senate and the assembly. FAPA is a direct response to a New York Court of Appeals decision, Freedom Mortg. Corp. v Engel, 37 N.Y.3d 1, reargument denied, 37 N.Y.3d 926 (2021) that seemingly gave lenders the right to unilaterally restart foreclosures and avoid a statute of limitations bar. FAPA seeks to curb a lender’s right to toll or extend the limitations period by amending existing state laws that affect the tolling of the limitations period for foreclosure actions and a lender’s use of New York’s saving statute to preserve the statute of limitations on an otherwise time-barred debt.…

Continue Reading The Foreclosure Abuse Prevention Act is Now Law

As we previously noted, the statute of limitations on actions to enforce a note or deed of trust can be a brutally effective sword for borrowers in Washington State. Under the six-year limitations period of RCW 7.28.300, a borrower is entitled to “judgment quieting title” against the security instrument where “an action to foreclose . . . would be barred by the statute of limitations.”Copper Creek (Marysville) Homeowners Ass’n v. Kurtz, 502 P.3d 865, 869 (Wash. Ct. App. 2022), Division 1 of the Washington Court of Appeals resolved an issue central to the statute of limitations—i.e., the effect, if any, of a bankruptcy discharge on the commencement of the limitations period on each installment of a mortgage loan. Since 2017, state and federal courts in Washington have concluded, in a series of unpublished rulings, that a bankruptcy discharge commences the statute of limitations on each and every installment of a mortgage loan. See, e.g., Jarvis v. Fed. Nat’l Mortg. Ass’n, No. C16-5194-RBL, 2017 WL 1438040, at *1 (W.D. Wash. Apr. 24, 2017). Courts routinely held that upon the expiration of six years after the bankruptcy discharge, the limitations period expired as to all installments, and the borrower was entitled to judgment quieting title against the security instrument.
Continue Reading Copper Creek Confirms That Bankruptcy Discharges Have No Effect on the Statute of Limitations in Washington State

The Supreme Court of California handed down a big win to mortgage lenders and servicers on March 7, 2022, when it issued a decision in Sheen v. Wells Fargo Bank, National Association et al., No. S258019, 2022 WL 664722, at *1 (Cal. Supreme Ct. March 7, 2022), ruling that lenders owe no tort duty sounding in general negligence principals to borrowers when reviewing loan modification requests. Going forward, this decision will impact litigation of negligence claims against mortgage lenders and servicers in California because it debunks the often-asserted claim for negligence based on allegations that the loan servicer “negligently” processed a loan modification application.
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Continue Reading California Supreme Court Rules No Tort Duty of Care Required by Lenders When Considering Borrowers’ Loan Modification Requests

In response to the COVID-19 pandemic, the federal and state governments as well as many local governments have established regulations to temporarily suspend foreclosure and eviction activities. Perkins Coie has created an easy-to-use state-by-state guidance tracker for eviction and foreclosure orders related to COVID-19.

Many loan servicers face the daunting task of issuing affidavits for their litigation cases across the United States. For the sake of efficiency, a loan servicer may wonder whether it would be worth it to streamline the affidavit process by using uniform acknowledgment language. However, research suggests that any alteration of an affidavit that replaces the traditional oath or “sworn to statement” with acknowledgment-like language is contrary to both New York statutory and case law and would likely result in rejection by New York State courts.
Continue Reading A Loan Servicer’s Acknowledgment vs. an Oath in New York