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Where plaintiffs assert civil claims alleging violations of the Fair Debt Collection Practices Act (the “FDCPA”), 15 U.S.C. §§ 1692-1692p, against mortgage lenders and their servicers, the defendants should assess the claims to determine whether they are subject to immediate dismissal. The first question that should be considered is whether the lender or servicer even qualifies as a “debt collector” pursuant to the FDCPA. If the answer to that question is “yes,” then the next question needing an answer is “what are the most effective available defenses?”
Continue Reading Lender and Servicer Defenses to FDCPA Claims

As vaccination rates increase, holds on foreclosure actions expire, and the courts slowly return to addressing their largely frozen foreclosure dockets, we can expect some familiar concerns to reappear. One common concern is the threat of dismissal pursuant to CPLR 3216 for unreasonable neglect to proceed. Given the severe disruption to mortgage litigation caused by the COVID-19 pandemic, and its effects on the staffing and continuity of many firms whose main focus is residential foreclosures, it would not be surprising to see an uptick in CPLR 3216 notices and/or CPLR 3216 dismissals. As with any dismissal, this poses a serious threat to lien enforceability and could lead to complete loss of the lien if, by the time of dismissal, the foreclosure is beyond or approaching six years since acceleration. Fortunately, the threat posed to mortgage liens is mitigated somewhat by the strict requirements imposed by the statutory language of CPLR 3216 and controlling case law.Continue Reading CPLR 3216 Dismissal Demands Compliance from All – Courts Included

The Appellate Division, Third Department recently issued a decision in Citimortgage, Inc. v Ramirez, ___AD3d___, 2020 NY Slip Op 07970 (2020) (“Ramirez“), concerning the plaintiff lender’s appeal from the Supreme Court’s dismissal of an action for recovery on a note, where plaintiff’s two prior foreclosures had already been dismissed. In its decision reversing dismissal, the Third Department held that when a lender accelerates a mortgage debt and elects to commence a foreclosure of the mortgage, the six-year statute of limitations on any claim by the lender for money damages on the note is tolled during such foreclosure(s), at least to the extent the foreclosures were themselves timely when filed.Continue Reading New York Appellate Divisions Reach Different Conclusions as to Whether Actions on the Note May be Maintained once the Statute of Limitations Bars Enforcement of the Mortgage, Leaving the Issue Ripe for the Court of Appeals