New York Senate Bill S5473D and its companion Assembly Bill A7737B seek to overturn the New York Court of Appeals’ well-reasoned decision in Freedom Mtge. v. Engel, 37 N.Y.3d 1 (N.Y. 2021), and retroactively annul lenders’ long-standing right to revoke their option to accelerate mortgage loans after default. If enacted, this so-called “foreclosure abuse prevention act” would present a radical departure from more than a century of well-settled law, likely accelerating gentrification and exacerbating New York City’s housing crisis by creating favorable conditions for real estate speculators to prey on, and profit off, vulnerable and distressed homeowners.

Mortgage Acceleration Law and Consequences

In New York, the six-year statute of limitations to enforce a mortgage begins to run once the mortgage debt is accelerated—i.e., when the borrower’s right and obligation to make monthly installment payments cease, and all sums become immediately due and payable. Where acceleration is optional under the note and mortgage, “some affirmative action must be taken to evince the note holder’s election to accelerate” (Albertina Realty Co. v. Rosbro Realty, 258 N.Y. 472, 476 (N.Y. 1932)), for example, by filing a lawsuit for foreclosure.

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