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(“Freedom Mortgage”) in full and final settlement of all claims that This branch office was licensed by the Department from November. In Freedom, the Court of Appeals decided four cases “each turning on the plaintiff would accept installment payments from the defendant. Welcome to Arvest Central Mortgage Company How can we help you with your mortgage needs? Struggling to make your payments?

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Freedom Mortgage Corporation now has more in common with Wells Fargo, Franklin American Mortgage, Walter Investment, and First Tennessee Bank than simply being mortgage lenders, as Freedom Mortgage is set to become the latest mortgage company to settle with the Department of Justice over alleged violations of the False Claims Act.

The Department of Justice announced Friday that Freedom Mortgage will pay $113 million for originating loans that did not meet Federal Housing Administration underwriting standards.

Freedom Mortgage joins a growing list of companies that settled with the government over FHA lending violations, including Wells Fargo, which recently agreed to a $1.2 billion settlement; Franklin American, which settled with the government for $70 million; Walter Investment, which settled for $29.6 million; and First Tennessee, the regional bank for First Horizon National, which settled for $212.5 million.

The False Claims act is the primary law the government uses to prosecute vendors it feels fraudulently represented themselves while doing business with the nation.

As with several of the other companies, Freedom Mortgage acted as a “direct endorsement lender” in the FHA insurance program, which grants the lender the authority to originate, underwrite and endorse mortgages.

Under the direct endorsement lender program, the FHA does not review a loan for compliance with FHA requirements before it is endorsed for FHA insurance.

According to the DOJ, Freedom Mortgage “failed to comply” with certain FHA origination, underwriting and quality control requirements.

As part of the settlement, Freedom Mortgage admitted that between Jan. 1, 2006 and Dec. 31, 2011, it certified mortgage loans for FHA insurance that did not meet Department of Housing and Urban Development underwriting requirements and were therefore not eligible for FHA mortgage insurance.

Additionally, the DOJ said that between 2006 and 2008, Freedom Mortgage did not meet the FHA’s quality control requirements by not sharing its early payment default QC reviews with production and underwriting management, and not requiring responses to its Early payment default QC findings from its production or underwriting staff.

Early payment default is a loan that becomes 60 days past due within the first six months of the loan.

The DOJ said that due to “staffing limitations” between 2008 and 2010, Freedom Mortgage did not always perform timely QC reviews or perform audits of all EPD loans, as is required by HUD.

The EPD QC reviews that Freedom Mortgage was able to perform revealed high defect rates, as much as 30% between 2008 and 2010, the DOJ said.

But, between 2006 and 2011, Freedom Mortgage did not report a single improperly originated loan to HUD, despite its obligation to do so, the DOJ said.

Additionally, in 2012, Freedom Mortgage identified hundreds of loans that “possibly should have been self-reported to HUD,” but reported only one.  

Therefore, the DOJ said that HUD insured hundreds of loans that were not eligible for FHA mortgage insurance, and subsequently incurred substantial losses when it paid insurance claims on the ineligible loans approved by Freedom Mortgage.

“Freedom Mortgage did not properly comply with FHA rules for the mortgages it was generating and did not adequately monitor early payment defaults,” said U.S. Attorney Paul Fishman for the District of New Jersey. 

“It also failed to report to HUD the defaults it did discover, as required by its participation in the program,” Fishman said. “Today’s settlement recognizes those failures and imposes an appropriate sanction.”

A representative from Freedom Mortgage said that the company made a “business decision” to put this issue behind it.

“Like many other high volume FHA-approved lenders, Freedom Mortgage Corporation was reviewed by the Department of Justice and HUD for loan origination activities that occurred as long as nine years ago,” the company said in a statement.

“Without any admission of liability and in order to avoid the extended distractions and expenses associated with protracted litigation, Freedom Mortgage made a business decision to resolve this matter,” the company continued.

“The settlement in no way affects Freedom’s ability to originate FHA insured loans,” the company said. “The company continues to focus on our most important mission – that of providing homeownership opportunities to our current and future customers.”

Источник: https://www.housingwire.com/articles/36811-freedom-mortgage-to-pay-113-million-for-false-claims-act-violations/
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Caldwell v. Freedom Mortgage Corporation

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Источник: https://www.freedomconveniencefees.com/Home/CCPA

Freedom Mortgage Corp. v. Engel

Freedom Mtge. Corp. v Engel 2021 NY Slip Op 01090 Decided on February 18, 2021 Court of Appeals DiFiore, J. Published by New York State Law Reporting Bureau pursuant to Judiciary Law § 431. This opinion is uncorrected and subject to revision before publication in the Official Reports.

Decided on February 18, 2021
No. 1
No. 2
No. 3
No. 4

[*1]Freedom Mortgage Corporation, Appellant,

v

Herschel Engel, Respondent, et al., Defendants. No. 2



Ditech Financial, LLC, & c., Appellant,

v

Santhana Kumar Nataraja Naidu, Respondent, et al., Defendants.



Juan Vargas, Respondent,

v

Deutsche Bank National Trust Company, Appellant.



Wells Fargo Bank, N.A., & c., Appellant, [*2]

v

Donna Ferrato, Respondent, The Simon & Mills Building Condominium Board, et al., Defendants.



Wells Fargo Bank, N.A., & c., Appellant,

v

Donna Ferrato, Respondent, Capital One Bank (USA) N.A., et al., Defendants.



Case No. 1:

Brian A. Sutherland, for appellant.

Anthony R. Filosa, for respondent.

Legal Services NYC, et al., American Legal and Financial Network, New York State Foreclosure Defense Bar, New York Mortgage Bankers Association, USFN - America's Mortgage Banking Attorneys, United Jewish Organizations of Williamsburg, Inc., amici curiae.

Case No. 2:

Christina A. Livorsi, for appellant.

Holly C. Meyer, for respondent.

New York State Foreclosure Defense Bar, United Jewish Organizations of Williamsburg, Inc., Adam Plotch, amici curiae.

Case No. 3:

Patrick Broderick, for appellant.

Justin F. Pane, for respondent.

Francis M. Caesar, New York State Foreclosure Defense Bar, United Jewish Organizations of Williamsburg, Inc., Adam Plotch, amici curiae.

Case No. 4:

Brian S. Pantaleo, for appellant.

M. Katherine Sherman, for respondent.

Francis M. Caesar, New York State Foreclosure Defense Bar, amici curiae.




DiFIORE, Chief Judge:

These appeals—each turning on the timeliness of a mortgage foreclosure claim—

involve the intersection of two areas of law where the need for clarity and consistency are at their zenith: contracts affecting real property ownership and the application of the statute of limitations. In Vargas v Deutsche Bank Natl. Trust Co. and Wells Fargo Bank, N.A. v Ferrato, the primary issue is when the maturity of the debt was accelerated, commencing the six-year statute of limitations period. Applying the long-standing rule derived from Albertina Realty Co. v Rosbro Realty Corp. (258 NY 472 [1932]) that a noteholder must effect an "unequivocal overt act" to accomplish such a substantial change in the parties' contractual relationship, we reject the argument in Vargas that the default letter in question accelerated the debt, and similarly conclude in Wells Fargo that two complaints in prior discontinued foreclosure actions that each failed to reference the pertinent modified loan likewise were not sufficient to constitute a valid acceleration. The remaining cases turn on whether the noteholder's voluntary discontinuance of a prior foreclosure action revoked acceleration of the debt, reinstating the borrower's contractual right to repay the loan over time in installments. Adopting a clear rule that will be easily understood by the parties and can be consistently applied by the courts, we hold that where the maturity of the debt has been validly accelerated by commencement of a foreclosure action, the noteholder's voluntary withdrawal of that action revokes the election to accelerate, absent the noteholder's contemporaneous statement to the contrary. These conclusions compel a reversal of the Appellate Division order in each case.

The parties do not dispute that under CPLR 213 (4), a mortgage foreclosure claim is governed by a six-year statute of limitations (see Lubonty v U.S. Bank N. A., 34 NY3d 250, 261 [2019])—in each case, the timeliness dispute turns on whether or when the noteholders exercised certain rights under the relevant contracts, impacting when each claim accrued and whether the limitations period expired, barring the noteholders' foreclosure claims. Because these cases involve the operation of the statute of limitations, we begin with some general principles. We have repeatedly recognized the important objectives of certainty and predictability served by our statutes of limitations and endorsed by our principles of contract law, particularly where the bargain struck between the parties involves real property (see ACE Sec. Corp., Home Equity Loan Trust, Series 2006-SL2 v DB Structured Prods., Inc., 25 NY3d 581, 593 [2015]). Statutes of limitations advance our society's interest in "giving repose to human affairs" (John J. Kassner & Co. v City of New York, 46 NY2d 544, 550 [1979] [citations omitted]). Our rules governing contract interpretation—the principle that agreements should be enforced pursuant to their clear terms—similarly promotes stability and predictability according to the expectations of the parties (see 159 MP Corp. v Redbridge Bedford, LLC, 33 NY3d 353, 358 [2019]). This Court has emphasized the need for reliable and objective rules permitting consistent application of the statute of limitations to claims arising from commercial relationships (see ACE Sec. Corp., 25 NY3d at 593-594, citing Ely-Cruikshank Co. v Bank of Montreal, 81 NY2d 399, 403 [1993]; Ajdler v Province of Mendoza, 33 NY3d 120, 130 n 6 [2019]).

Whether a foreclosure claim is timely cannot be ascertained without an understanding of the parties' respective rights and obligations under the operative contracts: the note and the mortgage. The noteholder's ability to foreclose on the property securing the debt depends on the language in these documents (see Nomura Home Equity Loan, Inc., Series 2006-FM2 v Nomura Credit & Capital, Inc., 30 NY3d 572, 581 [2017]; W.W.W. Assoc. v Giancontieri, 77 NY2d 157, 162-163 [1990]). In the residential mortgage industry, the use of standardized instruments is common, as reflected here where the relevant terms of the operative agreements are alike,[FN1] facilitating a general discussion of the operation of the statute of limitations with respect to claims arising from agreements of this nature. In each case before us, the note and mortgage create a relationship typical in the residential mortgage foreclosure context: in exchange for the opportunity to purchase a home, the borrower promised to repay a loan in favor of the noteholder, secured by a lien on that real property, over a 30-year extended term through a series of monthly installment payments. As prescribed in the agreements, the borrower's failure to timely make monthly installment payments constituted a default.

For over a century, residential mortgage contracts have typically provided noteholders the right to accelerate the maturity date of the loan upon the borrower's default, thereby demanding immediate repayment of the entire outstanding debt (see e.g., Odell v Hoyt, 73 NY 343, 345 [1878]). In these cases, the mortgages provide that the noteholder "may" require immediate payment of the outstanding debt—i.e., accelerate the maturity of the loan—upon the borrower's default [FN2] . It is plain from this language that whether to exercise this contractual right is a matter within the noteholder's discretion—the noteholder is not obliged to accelerate the loan upon a default (Adler v Berkowitz, 254 NY 433, 436 [1930]). The extended contractual relationship explains why residential mortgage agreements are generally structured in this way. Noteholders can—and often do—anticipate and tolerate defaults relating to timely payment, permitting the borrower to correct such deficiencies without a significant disturbance in the contractual relationship. Precipitous acceleration of the debt serves neither party as it works a fundamental alteration of the status quo.

Indeed, a noteholder's election to accelerate the entire debt has multiple, significant effects. Particularly relevant to these appeals, under the typical contract, acceleration permits the noteholder to commence an action seeking the remedy of full foreclosure (see Odell, 73 NY at 345)—an equitable tool permitting the noteholder to take possession of the real property securing the debt (Copp v Sands Point Mar., 17 NY2d 291, 293 [1966]). Accordingly, a cause of action to recover the entire balance of the debt accrues at the time the loan is accelerated, triggering the six-year statute of limitations to commence a foreclosure action (see CPLR 203[a], 213[4]; Phoenix Acquisition Corp. v Campcore, Inc., 81 NY2d 138, 143 [1993]; Lubonty, 34 NY3d at 261; see also CDR Créances S.A. v Euro-American Lodging Corp., 43 AD3d 45, 51 [1st Dept 2007]; EMC Mtge. Corp. v Patella, 279 AD2d 604, 605 [2d Dept 2001]; Lavin v Elmakiss, 302 AD2d 638, 639 [3d Dept 2003]; Business Loan Ctr., Inc. v Wagner, 31 AD3d 1122, 1123 [4th Dept 2006])[FN3] . Acceleration is therefore a significant event for statute of limitations purposes and, in two of these appeals, the timeliness dispute turns on whether certain acts—in Wells Fargo, the filing of complaints in prior foreclosure actions and, in Vargas, the issuance of a default letter—effectuated an acceleration of the indebtedness, starting the clock on the noteholders' claims.

I.

We have had few occasions to address how a lender may effectuate an acceleration of the maturity of a debt secured on real property. However, in Albertina Realty Co., we made clear that any election to accelerate must be made in accordance with the terms of the note and mortgage and that the parties are free to include provisions detailing what the noteholder must do to accelerate the debt (258 NY at 475-476). We further held that, to be valid, an election to accelerate must be made by an "unequivocal overt act" that discloses the noteholder's choice, such as the filing of a verified complaint seeking foreclosure and containing a sworn statement that the noteholder is demanding repayment of the entire outstanding debt (id. at 476). Although the Court did not otherwise decide "just what a holder of a mortgage must do to exercise the right of election, under an acceleration clause," it did clarify that "[t]he fact of election should not be confused with the notice or manifestation of such election" (id.). While the act evincing the noteholder's election must be sufficient to "constitute[] notice to all third parties of such [a] choice," a borrower's lack of actual notice "d[oes] not as a matter of law destroy" the effect of the election (id.). Put another way, the point at which a borrower has actual notice of an election to accelerate is not the operative event for purposes of determining when the statute of limitations begins to run. Indeed, in Albertina, we held that the debt was accelerated when the verified complaint and lis pendens were filed, even though the papers had not yet been served [*3]on the borrower (id.). The determinative question is not what the noteholder intended or the borrower perceived, but whether the contractual election was effectively invoked.

There are sound policy reasons to require that an acceleration be accomplished by an "unequivocal overt act." Acceleration in this context is a demand for payment of the outstanding loan in full that terminates the borrower's right to repay the debt over time through the vehicle of monthly installment payments (although the contracts may provide the borrower the right to cure) (see Federal Natl. Mtge. Assn. v Mebane, 208 AD2d 892, 894 [2d Dept 1994]). Such a significant alteration of the borrower's obligations under the contract—replacing the right to make recurring payments of perhaps a few thousand dollars a month or less with a demand for immediate payment of a lump sum of hundreds of thousands of dollars—should not be presumed or inferred; noteholders must unequivocally and overtly exercise an election to accelerate. With these principles in mind, we turn to the two appeals before us in which the parties dispute whether, and when, a valid acceleration of the debt occurred, triggering the six-year limitations period to commence a foreclosure claim.

Wells Fargo

The central issue in Wells Fargo is whether the commencement of either of two prior, dismissed foreclosure actions constituted a valid acceleration, impacting the timeliness of this foreclosure action (the fifth involving this property),[FN4] which was commenced in December 2017. Over ten years ago, borrower Donna Ferrato allegedly defaulted on a $900,000 loan secured by a mortgage on her Manhattan condominium unit. Upon Wells Fargo's initiation of this foreclosure action, Ferrato moved to dismiss, arguing that the debt was accelerated in September 2009 by the commencement of the second foreclosure action and the limitations period therefore expired six years later, in September 2015. Supreme Court denied Ferrato's motion, concluding that neither the second nor the third foreclosure actions—commenced in 2009 and 2011, respectively—validly accelerated the debt because, as Ferrato had successfully argued in Supreme Court in those actions, the complaints reflected an attempt to foreclose upon the original note and mortgage even though the terms of that note had been modified (increasing the debt and changing the interest rate) in 2008. On Ferrato's appeal, the Appellate Division (among other things) reversed and granted her motion to dismiss, reasoning that the September 2009 complaint effected a valid acceleration of the modified loan despite the failure to reference the correct loan documents [FN5]. The Appellate Division granted Wells Fargo leave to appeal to this Court and, because we agree with Wells Fargo that the modified loan debt which it now seeks to enforce could not have been accelerated by the complaints filed in the second (or, for that matter, third) foreclosure action which failed to reference the modified note, we reverse the portion of the Appellate Division order granting Ferrato's motion to dismiss the complaint in the fifth foreclosure action and deny that motion.

It is undisputed that the parties modified the original loan in 2008 after Ferrato's initial default, changing the terms by altering the interest rate and increasing the principal amount of the loan by more than $60,000. Nevertheless, in the second foreclosure action on which Ferrato relies, Wells Fargo attached only the original note and mortgage (stating a principal amount of $900,000) to the complaint and failed to acknowledge that the parties entered into a modification agreement altering the amount and terms of the loans (the only oblique evidence of a modification was in an attached schedule stating a principal dollar amount consistent with the modified debt). Although Ferrato successfully moved to dismiss both prior actions on the basis that these deficiencies precluded [*4]Wells Fargo from foreclosing on her property, she now asserts that the filing of those complaints validly accelerated the debt. It is well-settled that the filing of a verified foreclosure complaint may evince an election to accelerate (see Albertina, 258 NY at 476), but here the filings did not accelerate the modified loan (underlying the current foreclosure action) because the bank failed to attach the modified agreements or otherwise acknowledge those documents, which had materially distinct terms. Under these circumstances—where the deficiencies in the complaints were not merely technical or de minimis and rendered it unclear what debt was being accelerated—the commencement of these actions did not validly accelerate the modified loan (Albertina Realty Co., 258 NY2d at 476)[FN6]. Because Ferrato did not identify any other acceleration event occurring more than six years prior to the commencement of the fifth foreclosure action, the Appellate Division erred in granting her motion to dismiss that action as untimely.

Vargas

/i>

In Vargas, an action under RPAPL 1501 (4) to discharge a mortgage on real property commenced by borrower Juan Vargas against noteholder Deutsche Bank,[FN7] the parties dispute whether a default letter issued by the bank's predecessor-in-interest validly accelerated the debt. New York courts have observed, consistent with Albertina, that the acceleration of a mortgage debt may occur by means other than the commencement of a foreclosure action, such as through an unequivocal acceleration notice transmitted to the borrower (see Mejias v Wells Fargo N.A., 186 AD3d 472, 474 [2d Dept 2020]; Lavin, 302 AD2d at 638-639). However, the Appellate Division departments disagree on the language necessary to render a letter sufficiently unequivocal to constitute a valid election to accelerate. In Deutsche Bank Natl. Trust Co. v Royal Blue Realty Holdings, Inc. (148 AD3d 529 [1st Dept 2017]), the First Department concluded that a letter stating that the noteholder "will" accelerate upon the borrower's failure to cure the default constituted clear and unequivocal notice of an acceleration that became effective upon the expiration of the cure period. But the Second Department has rejected that view (see e.g., Milone v US Bank N.A.,164 AD3d 145 [2d Dept 2018]; 21st Mtge. Corp. v Adames, 153 AD3d 474 [2d Dept 2017]), reasoning that comparable language did not accelerate the debt and was "merely an expression of future intent that fell short of an actual acceleration," which could "be changed in the interim" (Milone, 164 AD3d at 152). This disagreement is at the heart of the parties' dispute in Vargas.

Vargas commenced this quiet title action against Deutsche Bank in July 2016, seeking to cancel a $308,000 mortgage on residential property in the Bronx, contending the statute of limitations for any claim to foreclose on the mortgage had expired. Deutsche Bank moved to dismiss and, in opposition, Vargas argued that an August 2008 default letter sent by the bank's predecessor-in-interest [FN8] had accelerated the debt and that the limitations period had expired before commencement of the quiet title action. Supreme Court initially rejected that contention, reasoning that the default letter was insufficient in itself to constitute an election to accelerate. However, on renewal, the court reversed course, denied Deutsche Bank's motion to dismiss and granted summary judgment to Vargas, declaring the mortgage unenforceable and the property free from any encumbrances. The Appellate Division affirmed, deeming the letter a valid acceleration pursuant to Royal Blue Realty, and we granted Deutsche Bank leave to appeal (34 NY3d 910 [2020]).

It is undisputed that the August 2008 default letter was sent to Vargas—the only question is whether it effectuated a clear and unequivocal acceleration of the debt, an issue of law. The default letter informed Vargas that his loan was in "serious default" because he had not made his "required payments," but that he could cure the default by paying approximately $8,000 "on or before 32 days from the date of [the] letter." It further advised that, should he fail to cure his default, the noteholder "will accelerate [his] mortgage with the full amount remaining accelerated and becoming due and payable in full, and foreclosure proceedings will be initiated at that time." The letter warned: "[f]ailure to cure your default may result in the foreclosure and sale of your property."

We reject Vargas's contention that the August 2008 letter accelerated the debt and we therefore reverse the Appellate Division order, deny plaintiff's motion for summary judgment and grant Deutsche Bank's motion to dismiss. First and foremost, the letter did not seek immediate payment of the entire, outstanding loan, but referred to acceleration only as a future event, indicating the debt was not accelerated at the time the letter was written. Nor was this letter a pledge that acceleration would immediately or automatically occur upon expiration of the 32-day cure period. Indeed, an automatic acceleration upon expiration of the cure period could be considered inconsistent with the terms of the parties' contract, which gave the noteholder an optional, discretionary right to accelerate upon a default and satisfaction of certain conditions enumerated in the agreement. Although the letter states that the debt "will [be] accelerate[d]" if Vargas failed to cure the default within the cure period, it subsequently makes clear that the failure to cure "may" result in the foreclosure of the property, indicating that it was far from certain that either the acceleration or foreclosure action would follow, let alone ensue immediately at the close of the 32-day period.

This case demonstrates why acceleration should not be deemed to occur absent an overt, unequivocal act. Noteholders should be free to accurately inform borrowers of their default, the steps required for a cure and the practical consequences if the borrower fails to act, without running the risk of being deemed to have taken the drastic step of accelerating the loan. Even in the event of a continuing default, default notices provide an opportunity for pre-acceleration negotiation—giving both parties the breathing room to discuss loan modification or otherwise devise a plan to help the borrower achieve payment currency, without diminishing the noteholder's time to commence an action to foreclose on the real property, which should be a last resort.

In Freedom Mortgage and Ditech, the issue is not whether or when the

debt was accelerated but whether a valid election to accelerate, effectuated by the commencement of a prior foreclosure action, was revoked upon the noteholder's voluntary discontinuance of that action. More than a century ago, in Kilpatrick v Germania Life Ins. Co. (83 NY 163, 168 [1905]), this Court addressed whether a noteholder who had exercised its discretionary option to accelerate the maturity of a debt pursuant to the terms of a mortgage could revoke that acceleration. We held that the noteholder's acceleration "became final and irrevocable" only after the borrower changed his position in reliance on that election by executing a new mortgage, applying an equitable estoppel analysis (id.).

Practically, the noteholder's act of revocation (also referred to as a de-acceleration) returns the parties to their pre-acceleration rights and obligations—reinstating the borrowers' right to repay any arrears and resume satisfaction of the loan over time via installments, i.e., removing the obligation to immediately repay the total outstanding balance due on the loan, and provides borrowers a renewed opportunity to remain in their homes, despite a prior default. Thus, following a de-acceleration, a payment default could give rise to an action on the note to collect missed installments (an action with a six-year statute of limitations that runs on each installment from the date it was due). Or the noteholder might again accelerate the maturity of the then-outstanding debt, at which point a new foreclosure claim on that outstanding debt would accrue with a six-year limitations period. Determining whether, and when, a noteholder revoked an election to accelerate can be critical to determining whether a foreclosure action commenced more than six years after acceleration is time-barred. In opposition to motions to dismiss, Freedom Mortgage and Ditech asserted that their foreclosure actions were timely because they had revoked prior elections to accelerate by voluntarily withdrawing those actions. In response, the borrowers did not dispute the noteholders' right to revoke but contended a voluntary discontinuance does not revoke an acceleration.

Although this Court has never addressed what constitutes a revocation in this context, the Appellate Division departments have consistently held that, absent a provision in the operative agreements setting forth precisely what a noteholder must do to revoke an election to accelerate, revocation can be accomplished by an "affirmative act" of the noteholder within six years of the election to accelerate (NMNT Realty Corp. v Knoxville 2012 Trust, 151 AD3d 1068, 1069 [2nd Dept 2017]; Lavin, 302 AD2d at 639; Federal Natl. Mtge. Assn. v Rosenberg, 180 AD3d 401, 402 [1st Dept 2020]). For example, an express statement in a forbearance agreement that the noteholder is revoking its [*5]prior acceleration and reinstating the borrower's right to pay in monthly installments has been deemed an "affirmative act" of de-acceleration (see U.S. Bank Trust, N.A. v Rudick, 172 AD3d 1430, 1430-1431 [1st Dept 2019]). However, no clear rule has emerged with respect to the issue raised here—whether a noteholder's voluntary motion or stipulation to discontinue a mortgage foreclosure action, which does not expressly mention de-acceleration or a willingness to accept installment payments, constitutes a sufficiently "affirmative act." Prior to 2017, without guidance from the Appellate Division, multiple trial courts had concluded that a noteholder's voluntary withdrawal of its foreclosure action was an affirmative act of revocation as a matter of law (see e.g., 4 Cosgrove 950 Corp. v Deutsche Bank Natl. Trust Co., 2016 WL 2839341, *1-4, 2016 NY Misc LEXIS 44901, *2-5 [Sup Ct, NY County, May 10, 2016]; see also U.S. Bank Trust, N.A. v Adhami, 2019 WL 486086, *5-6 and n 7, 2019 US Dist LEXIS 19599,*12-13 and n 7 [ED NY, Feb. 6, 2019, No. 18-CV-530 (PKC) (AKT)] [collecting cases]).

In 2017, the Second Department first addressed this issue in NMNT Realty (151 AD3d 1068), denying a borrower's summary judgment motion to quiet title on the rationale that the noteholder's motion to discontinue a prior foreclosure action raised a "triable issue of fact" as to whether the prior acceleration had been revoked [FN9]. The First Department has, at times, articulated the same rule (see Capital One, N.A. v Saglimbeni, 170 AD3d 508, 509 [1st Dept 2019]; U.S. Bank N.A. v Charles, 173 AD3d 564, 565 [1st Dept 2019]). However, more recently, as reflected in the Second Department's decisions in Freedom Mortgage and Ditech (among other cases), a different rule has emerged—that a noteholder's motion or stipulation to withdraw a foreclosure action, "in itself," is not an affirmative act of revocation of the acceleration effectuated via the complaint (see Freedom Mtge. Corp., 163 AD3 631, 633 [2d Dept 2018]; Ditech, 175 AD3d 1387, 1389 [2d Dept 2018]; Wells Fargo Bank, N.A. v Liburd, 176 AD3d 464, 464-465 [1st Dept 2019]). Both approaches require courts to scrutinize the course of the parties' post-discontinuance conduct and correspondence, to the extent raised, to determine whether a noteholder meant to revoke the acceleration when it discontinued the action (see e.g., Vargas, 168 AD3d 630, 630 [1st Dept 2019]). For example, in Christiana Trust v Barua (184 AD3d 140, 149 [2d Dept 2020])—after determining that the voluntary discontinuance was of no effect under the more recent approach described above—the court faulted the bank for failing to come forward with evidence that, after the discontinuance, it demanded resumption of monthly payments, invoiced the borrower for such payments, or otherwise demonstrated "it was truly seeking to de-accelerate the debt". Thus, the court suggested that the revocation inquiry turns on an exploration into the bank's intent, accomplished through an exhaustive examination of post-discontinuance acts.

This approach is both analytically unsound as a matter of contract law and unworkable from a practical standpoint. As is true with respect to the invocation of other contractual rights, either the noteholder's act constituted a valid revocation or it did not; what occurred thereafter may shed some light on the parties' perception of the event but it cannot retroactively alter the character or efficacy of the prior act. Indeed, where the contract requires a pre-acceleration default notice with an opportunity to cure, a post-discontinuance letter sent by the noteholder that references the then-outstanding total debt and seeks immediate repayment of the loan is not necessarily evidence that the prior voluntary discontinuance did not revoke acceleration—it is just as likely an indication that it did and the noteholder is again electing to accelerate due to the borrower's failure to cure a default. The impetus behind the requirements that an action be unequivocal and overt in order to constitute a valid acceleration and sufficiently affirmative to effectuate a revocation is that these events significantly impact the nature of the parties' respective performance obligations. A rule that requires post-hoc evaluation of events occurring after the voluntary [*6]discontinuance—correspondence between the parties, payment practices and the like—in order to determine whether a revocation previously occurred leaves the parties without concrete contemporaneous guidance as to their current contractual obligations, resulting in confusion that is likely to lead (perhaps inadvertently) to a breach, either because the borrower does not know that the obligation to make installment payments has resumed or the noteholder is unaware that it must accept a timely installment if tendered.

Indeed, if the effect of a voluntary discontinuance of a mortgage foreclosure action depended solely on the significance of noteholders' actions taking place months (if not years) later, parties might not have clarity with respect to their post-discontinuance contractual obligations until the issue was adjudicated in a subsequent foreclosure action (which is what occurred here); in both Freedom Mortgage and Ditech, the Appellate Division disagreed with Supreme Court's determinations that the prior accelerations had been revoked by the voluntary discontinuance. Not only is this approach harmful to the parties but it is incompatible with the policy underlying the statute of limitations because—under the post-hoc, case-by-case approach adopted by the Appellate Division—the timeliness of a foreclosure action "cannot be ascertained with any degree of certainty," an outcome which this Court has repeatedly disfavored (ACE Sec. Corp., 25 NY3d at 593-594). Further, the Appellate Division's recent approach suggests that a noteholder can retroactively control the effect of a voluntary discontinuance through correspondence it sends to the borrower after the case is withdrawn (which injects an opportunity for gamesmanship). We decline to adopt such a rule.

Rather, we are persuaded that, when a bank effectuated an acceleration via the commencement of a foreclosure action, a voluntary discontinuance of that action—i.e., the withdrawal of the complaint—constitutes a revocation of that acceleration. In such a circumstance, the noteholder's withdrawal of its only demand for immediate payment of the full outstanding debt, made by the "unequivocal overt act" of filing a foreclosure complaint, "destroy[s] the effect" of the election (see Albertina, 258 NY at 476). We disagree with the Appellate Division's characterization of such a stipulation as "silent" with respect to revocation (Freedom Mtge. Corp., 163 AD3d at 633). A voluntary discontinuance withdraws the complaint and, when the complaint is the only expression of a demand for immediate payment of the entire debt, this is the functional equivalent of a statement by the lender that the acceleration is being revoked. Accordingly, we conclude that where acceleration occurred by virtue of the filing of a complaint in a foreclosure action, the noteholder's voluntary discontinuance of that action constitutes an affirmative act of revocation of that acceleration as a matter of law, absent an express, contemporaneous statement to the contrary by the noteholder.

This approach comports with our precedent favoring consistent, straightforward application of the statute of limitations which serves the objectives of "finality, certainty and predictability," to the benefit of both borrowers and noteholders (ACE Sec. Corp., 25 NY3d at 593; see also Matter of Regina Metro. Co., LLC v New York State Division of Hous. & Community Renewal, 35 NY3d 332, 372 [2020] [noting New York's "strong public policy favoring finality, predictability, fairness and repose served by statutes of limitations"]; Deutsche Bank Natl. Trust Co. v Flagstar Capital Mkts., 32 NY3d 139, 151 [2018]). The effect of a voluntary discontinuance should not turn on courts' after-the-fact analysis of the significance of subsequent conduct and correspondence between the parties, occurring months, if not years, after the action is withdrawn. Such an approach leads to inconsistent and unpredictable results and, critically, renders it impossible for parties to know whether, or when, a valid revocation has occurred, inviting costly and time-consuming litigation to determine timeliness.

The impact of the noteholder's voluntary discontinuance of the action should be evident at the moment it occurs. A clear rule that a voluntary discontinuance evinces revocation of acceleration (absent a noteholder's contemporaneous statement to the contrary) makes it possible for attorneys to counsel their clients accordingly, allowing borrowers to take advantage of the opportunity afforded by the de-acceleration—reinstatement of the right to pay arrears and make installment payments, eliminating the obligation to immediately pay the entire outstanding principal amount in order to avoid losing their homes [FN10]. A return to the installment plan also makes it more likely that [*7]borrowers can benefit from the various public and private programs that exist to help borrowers work out of a default. Given the advantages of a clear default rule reinstating the pre-accelerated terms of the loan, the onus is on noteholders to inform the borrower at the time of the discontinuance if acceleration has not been revoked and it will not accept installment payments.

Freedom Mortgage & Ditech

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The appeals in Freedom Mortgage and Ditech are easily resolved by application of this rule. In both cases, the borrowers' motions to dismiss on statute of limitations grounds were predicated on the argument that an acceleration effectuated by a prior foreclosure action had never been revoked and the six-year limitations period expired prior to commencement of the instant action. In both cases, Supreme Court essentially applied the rule we adopt today—the acceleration was revoked by a voluntary discontinuance of the prior action—but the Appellate Division reversed in each case, dismissing the actions as time-barred. In Freedom Mortgage, the Appellate Division reasoned that the acceleration was not revoked because the stipulation was "silent" as to revocation. Applying the rule articulated above, Freedom Mortgage validly revoked the prior acceleration, evinced by the commencement of the July 2008 foreclosure action, when it voluntarily withdrew that action in January 2013 [FN11]. Engel, the borrower, does not identify any contemporaneous statement by Freedom Mortgage (in the stipulation or otherwise) that it was not de-accelerating the debt or would not accept monthly installment payments. There is no need to analyze the parties' subsequent conduct and correspondence to determine the effect of the 2013 stipulation. Further, that the discontinuance was effectuated by a stipulation between the parties does not mean that the borrower and the noteholder were required to expressly agree on the effect of the discontinuance—whether to exercise the contractual right to accelerate, and de-accelerate, remained within the discretion of Freedom Mortgage. Because the July 2008 election had been revoked and the present action was commenced within six years of any subsequent acceleration, the Appellate Division erred in granting Engel's motion to dismiss on statute of limitations grounds. Accordingly, Engel having directed no challenge to the noteholder's prima facie showing of his default, we reverse the Appellate Division order and reinstate the Supreme Court order granting relief to the bank.

A reversal is also warranted in Ditech, where the Appellate Division reasoned that the voluntary withdrawal of the prior action "did not, in itself constitute an affirmative act" of revocation [FN12]. The February 2014 stipulation [*8]discontinuing the prior foreclosure action revoked the acceleration effectuated by the commencement of that action, and the record contains no contemporaneous statement by Ditech to the contrary. That Ditech sent Naidu, the borrower, a payoff letter in March 2015—more than a year later—communicating the amount in default does not alter that result. Naidu has not alleged that any other unrevoked acceleration occurred more than six years before the January 2016 commencement of this action that would render it untimely and raises no other arguments in defense of Ditech's summary judgment motion. We therefore reverse the Appellate Division order and reinstate the Supreme Court orders, which denied Naidu's motion to dismiss and granted Ditech summary judgment.

Wells Fargo

Finally, we return to Wells Fargo to address an additional issue relating to de-acceleration that arose in a prior foreclosure action, the fourth action. Although Wells Fargo properly referenced the modified loan in that complaint, Ferrato moved to dismiss that action, alleging a lack of proper service. Supreme Court denied the motion but, on Ferrato's appeal, the Appellate Division determined a question of fact was raised and remitted for a traverse hearing. Wells Fargo then moved both to voluntarily discontinue that action and to revoke acceleration of the loan. Supreme Court granted the motion to discontinue but stated, without explanation, that "the acceleration of the subject loan is NOT revoked." On the bank's appeal of that portion of the order, the Appellate Division affirmed, indicating that Wells Fargo could not de-accelerate because it "admitted that its primary reason for revoking acceleration of the mortgage debt was to avoid the statute of limitations bar."[FN13]

The lower courts erred in denying Wells Fargo's motion to revoke and we therefore reverse that portion of the Appellate Division order as well. As stated above, while a noteholder may be equitably estopped from revoking its election to accelerate (see Kilpatrick, 183 NY at 168), defendant Ferrato did not allege that she materially changed her position in detrimental reliance on the loan acceleration, and the courts conducted no equitable estoppel analysis. We reject the theory, argued by Ferrato and reflected in several decisions (see e.g., Wells Fargo Bank, N.A. v Portu, 179 AD3d 1204, 1207 [3d Dept 2020]; Christiana Trust, 184 AD3d at 146; Milone, 164 AD3d at 154; Deutsche Bank Natl. Trust Co. Ams. v Bernal, 56 Misc 3d 915, 924 [Sup Ct, Westchester County 2017]), that a lender should be barred from revoking acceleration if the motive of the revocation was to avoid the expiration of the statute of limitations on the accelerated debt. A noteholder's motivation for exercising a contractual right is generally irrelevant (see generally Metropolitan Life Ins. Co. v Noble Lowndes Intl., 84 NY2d 430, 435 [1994])—but it bears noting that a noteholder has little incentive to repeatedly accelerate and then revoke its election because foreclosure is simply a vehicle to collect a debt and postponement of the claim delays recovery.

Accordingly, in Freedom Mortgage and Ditech, the orders of the Appellate Division should be reversed, with costs, and the Supreme Court orders reinstated; in Vargas, the order of the Appellate Division should be reversed, with costs, defendant's motion to dismiss the complaint granted and plaintiff's cross motion for summary judgment denied; and in Wells Fargo, the order of the Appellate Division should be reversed, with costs, defendant Ferrato's motion to dismiss denied, plaintiff's motion to revoke acceleration of the mortgage loan granted and the certified question not answered as unnecessary.


WILSON, J. (concurring):

I fully concur in the majority opinion but write to make one caveat clear. We have not decided whether the notes and mortgages at issue here permit a lender to revoke an acceleration.[FN14] In three of the four cases before us, the issue was not in dispute: the borrowers did not contend that the noteholders lack the contractual right to revoke an acceleration. Ms. Ferrato stated that it is "well-established that a lender may revoke its election to accelerate the mortgage." Similarly, Mr. Naidu noted that the "[l]ender maintains the discretionary right to later revoke the acceleration." Neither party in Vargas mentioned the issue. In contrast, Mr. Engel argued at length that the note and mortgage grant the noteholder the contractual right to accelerate the loan but lack any contractual authorization to revoke that election (absent consent of the borrower). However, Mr. Engel raised that issue for the first time on appeal. Thus, it was not properly preserved for our review (see, e.g., Feigelson v Allstate Ins. Co., 31 NY2d 913, 916 [1972]; Arthur Karger, Powers of the New York Court of Appeals § 17:1 [Sept. 2020 Update]).


RIVERA, J. (dissenting in part):

For the reasons discussed by the majority, I agree that there was no effective acceleration in Vargas v Deutsche Bank National Trust Co. and Wells Fargo Bank, N.A. v Ferrato. I am also in agreement that it was error for the lower courts to deny Wells Fargo's motion to revoke. Accordingly, I concur in the majority's resolution of Vargas and Wells Fargo.

The question of whether the noteholders effectively revoked acceleration in Freedom Mortgage Corp. v Engel and Ditech Financial LLC v Naidu—an issue of material significance in both appeals—is another matter.

As Judge Wilson notes, only the borrower in Freedom Mortgage has challenged the revocation on the ground that the noteholder does not have a contractual right to unilaterally revoke an acceleration (concurring op at 2). I agree with my colleague that because the borrower raises this challenge for the first time on appeal, it is unpreserved for our review (see Bingham v New York City Tr. Auth., 99 NY2d 355, 359 [2003]).

Depending on whether and when we resolve that question, the rule adopted by the majority in these appeals may stand without further consideration, or be affirmed, modified, or discarded in the future. Nevertheless, if we are going to impose a "deceleration" rule based on the noteholder's voluntary withdrawal of a foreclosure action (majority op at 2), I would require that the noteholder provide express notice to the borrower regarding the effect of that withdrawal. I see no reason why an acceleration requires an unequivocal overt act—one that leaves no doubt as to the noteholder's intent—but revocation may be assumed by implication, requiring only that the noteholder affirmatively disavow an intention to revoke (id.). As the Second Department has recognized, there are many reasons for a noteholder to voluntarily withdraw an action (see Christiana Trust v Barua, 184 AD3d 140, 147 [2d Dept 2020], lv denied 35 NY3d 916 [2020]). Application of the rule requiring notice is simple and not at all burdensome. The noteholder need only inform the borrower in the stipulation or a letter that withdrawal constitutes a revocation of the acceleration. Such notice ensures transparency in a high-stakes relationship.

Because appellants provided no evidence of notice, I would affirm the Appellate Division in Freedom Mortgage and Ditech.

For No. 1:

Order reversed, with costs, and order of Supreme Court, Orange County, reinstated. Opinion by Chief Judge DiFiore. Judges Stein, Fahey, Garcia, Wilson and Feinman concur, Judge Wilson in a concurring opinion. Judge Rivera dissents and votes to affirm in an opinion.

For No. 2:

Order reversed, with costs, and orders of Supreme Court, Queens County, reinstated. Opinion by Chief Judge DiFiore. Judges Stein, Fahey, Garcia, Wilson and Feinman concur, Judge Wilson in a concurring opinion. Judge Rivera dissents and votes to affirm in an opinion.

For No. 3:

Order reversed, with costs, defendant's motion to dismiss the complaint granted and plaintiff's cross motion for summary judgment denied. Opinion by Chief Judge DiFiore. Judges Rivera, Stein, Fahey, Garcia, Wilson and Feinman concur, Judge Rivera in a concurring opinion and Judge Wilson in a separate concurring opinion.

For No. 4:

Order reversed, with costs, defendant Ferrato's motion to dismiss denied, plaintiff's motion to revoke acceleration of the mortgage loan granted and certified question not answered as unnecessary. Opinion by Chief Judge DiFiore. [*9]Judges Rivera, Stein, Fahey, Garcia, Wilson and Feinman concur, Judge Rivera in a concurring opinion and Judge Wilson in a separate concurring opinion.

Decided February 18, 2021

Footnotes

Footnote 1: The agreements at issue in three of the cases before us are uniform instruments issued by Fannie Mae for use in New York (mortgage [Form 3033]; note [Form 3233; 3518]). The note and mortgage executed in Wells Fargo do not appear to be Fannie Mae or Freddie Mac standardized instruments.

Footnote 2:In addition, the Fannie Mae Form 3033 mortgage provides that the option to accelerate may be exercised only upon satisfaction of certain conditions, including notice and an opportunity for the borrower to correct the default.

Footnote 3:Prior to acceleration, upon a default on the obligation to timely make an installment payment, a cause of action accrues to recover that installment payment, triggering the six-year statute of limitations for an action to recover that payment (see Hahn Automotive Warehouse, Inc. v American Zurich Ins. Co., 18 NY3d 765, 770 [2012]; e.g., Loiacono v Goldberg, 240 AD2d 476, 477 [2d Dept 1997]; Pagano v Smith, 201 AD2d 632, 633-634 [2d Dept 1994]) but a default alone does not trigger the statute of limitations relating to a foreclosure action (see Phoenix Acquisition Corp., 81 NY2d at 143).

Footnote 4: As these cases reflect, for many reasons, including the extraordinary length of the contractual relationship—frequently spanning decades—multiple foreclosure actions involving the same borrower are not unusual. This type of contractual relationship is not static. Not only might a borrower's circumstances and payment practices vary over the course of three decades (a default may lead to a foreclosure action that is ultimately resolved through payment of arrears), but the party entitled to enforce the note is similarly variable because notes secured by residential mortgages are typically negotiable instruments, meant to be transferred and assigned. Moreover, the legislature has imposed exacting standards for bringing a foreclosure claim—e.g., prescribing the precise method of providing pre-suit notice to the borrower (see RPAPL 1304) and detailing what must be included in a foreclosure complaint (see e.g., CPLR 3012-b)—and an action may be dismissed for failure to adhere to those requirements.

Footnote 5: The bank's appeal from another portion of the Appellate Division order relating to the fourth action between the parties is addressed in section II.

Footnote 6: Notably, in the third foreclosure action, not only was the complaint plagued by the same defects as the second action, but Wells Fargo also asserted in response to the motion to dismiss that it was proceeding on the original, unmodified loan. The court dismissed the action, reasoning that Wells Fargo had commenced the action on the wrong debt.

Footnote 7: Under section 1501 of the Real Property Actions and Proceedings Law (RPAPL), a person with an interest in the property may commence 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" "[w]here the period allowed by the applicable statute of limitation for the commencement of an action to foreclose a mortgage . . . has expired" (RPAPL 1501[4]).

Footnote 8: No argument is made here that the predecessor-in-interest lacked the authority to accelerate the maturity of the debt and we therefore do not address that question.

Footnote 9: In these four cases, the relevant facts—e.g., whether or not a voluntary discontinuance occurred or whether a default letter was sent—are not disputed and thus, whether acceleration was or was not revoked does not present a question of fact in the context of these appeals. Instead, the parties dispute the legal significance of events they acknowledge occurred—whether the voluntary discontinuance constituted a revocation of an acceleration that was accomplished by commencement of a prior action—a question that we determine as a matter of law. To be sure, there may be cases in which the question of whether an acceleration was validly revoked involves an "issue of fact," such as where the operative facts surrounding a purported acceleration or revocation are disputed, and the court may be unable to decide whether the statute of limitations had run as a matter of law. But that is not the situation in these appeals. Likewise, different notes and mortgage instruments may incorporate their own rules for acceleration or revocation thereof.

Footnote 10: Moreover, this clarity also benefits those seeking to purchase notes secured by residential mortgages—negotiable instruments that are intended to be bought and sold, often changing hands repeatedly during their duration. Unlike the current Second Department approach, a clear rule on the effect of a voluntary discontinuance provides potential noteholders the opportunity to assess, based on clear, objective indicia and without the aid of an appellate court, the nature and status of the instrument they look to buy (e.g., whether the note is accelerated) and value it accordingly.

Footnote 11: In Freedom Mortgage, after sending Engel, the borrower, an August 2013 letter notifying him of its election to accelerate the debt secured by a mortgage on his property, the bank commenced the instant foreclosure action in February 2015. Engel answered and moved to dismiss the complaint as time-barred, asserting that the debt was accelerated in July 2008 upon the filing of a prior foreclosure action and, as such, the six-year limitations period expired several months before the instant action was commenced. Freedom opposed Engel's motion to dismiss and cross-moved for summary judgment, arguing as relevant here that its voluntary discontinuance of the prior claim revoked that acceleration and the statute of limitations for this action was not triggered until its August 2013 acceleration letter. Supreme Court granted Freedom's cross motion for summary judgment, struck Engel's statute of limitations affirmative defense and implicitly denied his motion. On Engel's appeal, the Appellate Division reversed and determined the action was time-barred, reasoning that the acceleration was not revoked when the prior action was discontinued because the stipulation was "silent" as to revocation. We granted Freedom Mortgage leave to appeal (33 NY3d 1039 [2019]).

Footnote 12: Ditech commenced this foreclosure action against Naidu in January 2016 by filing a verified complaint stating that it was accelerating the mortgage and declaring the entire outstanding loan immediately due and payable, including recovery of unpaid installment payments. Naidu answered, raising the statute of limitations as an affirmative defense, and subsequently moved to dismiss the action as time-barred, arguing that a prior foreclosure action commenced in 2009 had accelerated the debt and was not revoked when that action was voluntarily discontinued by the noteholder. Ditech opposed the motion to dismiss and cross-moved for summary judgment on the complaint as against Naidu. In two orders, Supreme Court denied Naidu's motion to dismiss, concluding that the stipulation discontinuing the prior action without prejudice was an "affirmative act of revocation" and thus, the statute of limitations had not run, and granted Ditech's motion for summary judgment, determining that it had established its prima facie entitlement to judgment of foreclosure and Naidu failed to raise a question of fact in response. On Naidu's appeal, the Appellate Division reversed the orders insofar as appealed from, granted Naidu's motion to dismiss the complaint insofar as asserted against him as time-barred, and denied as academic plaintiff's cross-motion for summary judgment insofar as asserted against Naidu. The Court held that Ditech failed to demonstrate that the acceleration of the debt, effectuated by the filing of the July 2009 foreclosure action, was revoked within six years, reasoning that the February 2014 discontinuance of the action "did not, in itself" constitute an affirmative act of de-acceleration. Thus, the Court concluded, the action before it—commenced in January 2016—was untimely. We granted the bank leave to appeal (34 NY3d 910 [2020]).

Footnote 13: As indicated above, the Appellate Division addressed both the fourth and fifth foreclosure actions in one order and subsequently granted Wells Fargo's motion for leave to appeal to this Court.

Footnote 14: Three of those are the standard Fannie Mae forms for notes and mortgages (majority op. at 3 n.1).



Primary Holding

In these four appeals turning on the timeliness of a mortgage foreclosure claim, the Court of Appeals held that the Appellate Division order in each case must be reversed.


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Источник: https://law.justia.com/cases/new-york/court-of-appeals/2021/1.html
AAC Credit Union www.aaccreditunion.org616-459-4429Advantage One Credit Unionwww.myaocu.com734-676-7000Adventure Credit Unionwww.adventurecu.org616-514-1769Advia Credit Unionwww.adviacu.org844-238-4228Advisors Mortgage Group, LLCadvisorsmortgage.com800-778-9044AIM Financial, Inc.www.aimfinancial.com616-855-3300AHP Servicing LLCahpservicing.com312-386-5678Alpena Community Credit Unionwww.alpenacreditunion.com989-356-4561Alpena Alcona Area Credit Unionwww.aaacu.com989-356-3577American Financial Resources, Inc.www.afrcorp.com973-983-5626American Financing Corporationwww.americanfinancing.net303-695-7000AmeriFirst Financial, Inc.amerifirstloan.com480-344-1900AmeriFirst Home Improvement Finance, LLCNo website available402-505-6597AmeriSave Mortgage Corporationwww.amerisave.com866-514-7283American Mortgage Source LLCangelamackinnonhomeloans.com405-340-7044Arbor Financial Credit Unionwww.arborfcu.org269-375-6702Astera Credit Unionwww.asteracu.com517-323-3696Awakon Federal Credit Unionawakonfcu.net989-733-8557Banco Mortgage Centrewww.bancomortgage.net248-258-5600Best Capital Fundingwww.bestcapfunding.com800-429-7283Best Financial Credit Unionwww.bestfinancialcu.org231-733-1329 Birmingham Bloomfield Credit Unionwww.bbcu.org248-647-5958Bloom Credit Unionwww.bloomcu.org616-452-2161Blueleaf Lending, LLCwww.blueleaflending.com844-251-6045BlueOx Credit Unionwww.blueoxcu.org800-648-8035Calcite Credit Unionwww.calcitecu.com989-734-4130Caliber Home Loans, Inc.www.caliberhomeloans.com469-242-1155CASE Credit Unionwww.casecu.org888-393-7716Catholic Vantage Financialwww.mycvf.org734-432-0212Century Bank and Trust www.centurybankandtrust.com517-278-1500Chippewa County Credit Unionchippewacountycu.com906-632-3134ChoiceOne Bankwww.choiceone.com888-775-6687Christian Financial Credit Union www.christianfinancialcu.org586-772-6330CMG Mortgage, Inc. dba CMG Financialwww.cmgfi.com800-501-2001Commercial Bankwww.commercial-bank.com989-875-4144Community Alliance Credit Unionwww.communityalliancecu.org734-464-8079Community Choice Credit Unionwww.communitychoicecu.com877-243-2528Community Financial Credit Union www.cfcu.org877-937-2328 Community First Federal Credit Unionwww.cffcu.biz989-352-6031Community Loan Servicing LLCcommunityloanservicing.com800-457-5105Community West Credit Unionwww.communitywestcu.org616-261-5657Compass Credit Unionwww.compasscu.com616-887-8262Consumer Real Estate Finance Co.www.crefco.com866-847-3001Consumers Credit Unionwww.consumerscu.org800-991-2221Contour Mortgage Corporationwww.contourmortgage.com800-568-1588COPOCO Community Credit Unionwww.copoco.org989-460-3623Cornerstone Community Financial Credit Unionwww.ccfinancial.com248-340-9310 Credit Union Advantagewww.cuadvantage.coop248-996-6070Credit Union ONEwww.cuone.org800-451-4292Diversified Members Credit Unionwww.dmcu.com313-568-5000Dort Financial Credit Uniondortonline.org810-767-8390Dow Chemical Employees' Credit Unionwww.dcecu.org989-835-7794Dowagiac Area Federal Credit Unionwww.dafcu.net269-782-2410Downriver Community Federal Credit Unionwww.downrivercu.com313-386-2200Draper and Kramer Mortgage Corp.dkmortgage.com630-376-2100E Mortgage, LLChanslandwehr.zipforhome.com405-514-3884Eastern Michigan Bankwww.emb.bank810-679-2500ELGA Credit Unionwww.elgacu.com810-715-3542Ellis Management Group LLC dba EMG MortgageNo website available229-886-6780Embers Credit Unionwww.embers.org906-228-7080Emigrant Mortgage Company, Inc.  www.emigrantmortgage.com 800-836-1260Exchange State Bankwww.exchangestatebank.com810-657-9333Extra Credit Unionwww.extracreditunion.org877-638-7628Family Financial Credit Unionff-cu.org231-733-4600Family First Credit Unionwww.fam1st.com989-759-1686Figure Lending LLCwww.figure.com888-819-6388Filer Credit Unionwww.filercu.com231-723-3400Finance of America Mortgagewww.foamortgage.com909-539-6624Finance of America Reversewww.fareverse.com 909-539-6624Financial Plus Credit Unionwww.myfpcu.com800-748-0451FinancialEdge Community Credit Union www.financialedgeccu.org989-892-6088First Guaranty Mortgage CorporationNo website available800-296-2275First Independence Bankwww.firstindependence.com313-256-8400First Option Mortgage, LLCwww.myfirstoption.com770-423-8200First State Bankwww.fsb.bank586-445-6704First State Bank of Decaturwww.fsbdecatur.com269-423-7014First United Credit Unionwww.firstunitedcu.org616-532-9067Flagstar Bankwww.flagstar.com800-945-7700Frankenmuth Credit Unionfrankenmuthcu.org989-497-1600Franklin Credit Management Corporationwww.franklincredit.com201-604-1800Freedom Mortgage Corporationwww.freedommortgage.com317-537-3311FreeStar Financial Credit Unionwww.freestarfinancial.com586-466-7800Geneva Financial, LLCwww.GenevaFi.com888-889-0009Genisys Credit Unionwww.genisyscu.org248-322-9800Goldman Sachs Mortgage CompanyNo website availableN/AGR Consumers Credit Unionwww.grccu.com616-538-2810Gratiot Community Credit Unionwww.gratiotcu.org989-463-8321GS Bank USANo website availableN/AHallmark Home Mortgage, LLCwww.hallmarkhomemortgage.com888-490-1428Hancock Mortgagewww.hancockmortgage.com888-391-8237HarborLight Credit Unionwww.harborlightcu.org231-894-5608Health Advantage Federal Credit Unionwww.healthadvantagecu.com989-791-7070Home Point Financial Corporationwww.homepointfinancial.com800-686-2404Home Point Mortgage Acceptance CorporationNo website available317-663-5913Homestead Funding Corpwww.homesteadfunding.com800-724-1329Honor Bankwww.myhonorbank.com877-325-8031Honor Credit Unionwww.honorcu.com800-442-2800Huron Valley State Bankwww.hvsb.com248-684-9626Independent Bankwww.independentbank.com844-279-2748Inlanta Mortgage Inc.www.inlanta.com262-797-7111Integra First Federal Credit Union www.integrafirstfcu.com906-863-5566Intercontinental Capital Groupintercontinentalcapital.com877-828-9569Interstate Home Loan Center Inc.www.interstatehomeloans.com631-393-6018Irene Partners, LLCirenepartners.com734-655-9470Isabella Community Credit Union www.iccuonline.com989-773-5927Ivy Mortgage, Inc.www.ivydirect.com301-317-1010Jolt Credit Unionwww.joltcu.com989-799-8744Kalamazoo County State Bankwww.kcsbank.com269-679-5291Kaye Financial Corporationkayefinancial.com248-538-1500Kellogg Community Credit Unionwww.kelloggccu.org269-968-9251Kent County Credit Unionwww.mykccu.com/coronavirus616-336-3490LAFCUwww.lafcu.com517-622-6600Lake Huron Credit Unionwww.LHCU.org989-752-5214Lake Trust Credit Unionwww.laketrust.org517-267-7200Lenco Credit Unionwww.lenco.org517-263-0851LendUS LLCwww.lend.us925-295-9300Level One Bankwww.levelonebank.com248-737-0300Lincoln Park Community Credit Unionwww.lpccu.coop313-389-2300LoanStream Mortgagewww.LSMortgage.com800-760-1833LOC Credit Union www.locfederal.com800-837-4562Longbridge Financial, LLClongbridge-financial.com 201-252-8817Luxury Mortgage Corp.www.luxurymortgage.com203-327-6000Madison Management Services, LLCwww.madisonmanagement.net877-563-4164Marshall Community Credit Unionwww.marshallcommunitycu.com269-781-9885Mayville State Bankwww.MayvilleStateBank.com800-732-0642MCLP Asset Company, Inc.No website availableN/AMeijer Credit Unionwww.meijercreditunion.com616-784-4822Member First Mortgage, LLCwww.memberfirstmortgage.com866-636-1053MemberFocus Community Credit Unionwww.memberfocus.org313-581-2002Members First Credit Union www.mfcu.net989-835-5100Mercantile Bank of Michiganwww.mercbank.com800-453-8700Mi Bankwww.mi.bank248-965-9801Michigan Coastal Credit Unionwww.michigancoastal.com231-777-3620Michigan Columbus Federal Credit Union www.mcfcu.net734-425-5080Michigan Educational Credit Unionwww.michedcu.org734-455-9200Michigan First Credit Unionmichiganfirst.com248-443-4600Michigan Legacy Credit Unionmichiganlegacycu.org734-285-0600Michigan Mortgage Solutionswww.michiganmortgagesolutions.com248-674-6450Michigan One Community Credit Union www.m1ccu.org616-527-3900Michigan Schools and Government Credit Unionwww.msgcu.org866-674-2848Michigan State University Federal Credit Unionwww.msufcu.org517-333-2424MLD Mortgage Inc. dba The Money Storewww.themoneystore.com973-805-2000Monroe Community Credit Unionwww.monroecommunitycu.org734-242-3222Montcalm Public Employees Credit Union www.mpecreditunion.com989-427-5663Mortgage Center LCwww.mortgagecenter.com248-353-4449Mr. Cooper Groupwww.mrcooper.com888-497-2432MTGLQ Investors, LPNo website availableN/AMuskegon Federal Credit Unionwww.muskfedcu.com231-722-7285myCUmortgagewww.myCUmortgage.com877-912-8006Nations Lending Corporationwww.myloancare.com800-274-6600Neighborhood Mortgage Solutionswww.gonms.org989-497-1651Network Funding, L.P.nflp.com866-935-5212Normandy Corporation dba Normandy Mortgage Corporationnormandy.com585-256-2600Northpointe Bankwww.northpointe.com888-672-5626Northwind Financial CorporationNorthwindFinancial.com616-977-7900NWL Company, LLCNo website available212-667-9000Old Mission Bankwww.oldmissionbank.com906-635-9910OMNI Community Credit Unionwww.omnicommunitycu.org269-441-1400One Detroit Credit Unionwww.onedetroitcu.org313-965-8640Opportunity Resource Fundwww.oppfund.org517-372-6001OUR Credit Unionwww.ourcuonline.org248-549-3838Owner Builder Loans, LLCwww.ownerbuilderloans.com800-543-5600Oxford Bankwww.oxfordbank.com248-628-2533Parkside Credit Unionwww.parksidecu.org734-525-0700People Driven Credit Unionwww.peopledrivencu.org248-263-4102Peoples Mortgage Cowww.peoplesmortgage.com480-752-3530Peoples State Bankwww.psbup.com906-387-2009PFCUwww.pfcu4me.com547-647-7571PHH Mortgage Corp.www.mortgagequestions.com856-917-0902Planet Home Lending, LLCplanethomelending.com855-884-2250Plaza Home Mortgage, Incwww.plazahomemortgage.com858-346-1208Preferred Credit Unionpreferredcu.org800-328-4131Princeton Mortgage Corporationwww.princetonmortgage.com609-737-1000Private Mortgage Wholesale, Inc.gopmw.com616-822-3068Prosperity Home Mortgage, LLCwww.phmloans.com877-275-1762Public Service Credit Unionwww.PSCUnow.com734-641-8400Quicken Loans / Rocket Mortgagewww.rocketmortgage.com/learn/covid-19-resource-guide888-452-8179Residential Acceptance Corporationwww.racmtg.com813-935-1828Rushmore Loan Management Services LLCwww.rushmorelm.com888-504-6700 Safe Harbor Credit Unionwww.safeharborcu.org231-843-2323Security Credit Unionwww.securitycu.org810-235-2322ServiceMac, LLCwww.myservicemac.com844-478-2622Servion, Inc.www.myservion.com651-631-3111Settlers Federal Credit Unionwww.settlersfcu.com906-827-3240Shelby State Bankwww.shelbybank.com231-861-6049Shore to Shore Community Federal Credit Unionwww.shore2shorecu.com866-661-8328Sierra Pacific Mortgage Co. Inc.www.sierrapacificmortgage.com916-932-1700SIRVA Mortgage, Inc.www.loansolutioncenter.com800-531-3837Soo Co-op Credit Unionwww.soocoop.com906-632-5300South Central Credit Unionsouthcentralcu.org517-787-2220Southeast Michigan State Employees Federal Credit Unionwww.smsefcu.com248-557-2266Southern Michigan Bank & Trustwww.smb-t.com517-279-5500Sovita Credit Unionwww.sovitacu.org810-720-8300Stockton Mortgage Corporationstockton.com502-227-1100Sun West Mortgageswmc.com800-453-7884Sunrise Family Credit Unionwww.sunrisefamilycu.org989-684-1730Tahquamenon Area Credit Union www.tacumi.com906-293-5117TBA Credit Unionwww.tbacu.com231-946-7090Team One Credit Unionteamonecu.org989-754-6575THE LOCAL Credit Unionwww.THELOCALcreditunion.com586-264-1212The Money Sourcethemoneysource.com/happy-hub/coronavirus866-867-0330The Mortgage House, Inc.www.mortgagehouse.org616-392-2290The State Bankthestatebank.com810-629-2263The State Savings Bank of Manistiquewww.statesavingsbank.com906-341-4600Thornapple Credit Unionthornapplecu.com269-948-8369TJC Mortgage, Inc. dba MortgageRightmortgageright.com205-582-4065Towne Mortgage Companywww.townemortgage.com/coronavirus-covid-19800-979-9977Traverse Catholic Federal Credit Unionwww.tcfedcu.org231-946-6655TRUE Community Credit Unionwww.trueccu.com517-841-4119TruNorth Federal Credit Unionwww.trunorthcu.org906-485-1210Ukrainian Selfreliance Michigan Federal Credit Unionwww.usmfcu.org 586-756-3300Union Bankwww.ubmich.com616-374-3278United Bank of Michiganwww.unitedbank4u.com/covid-19616-559-7000United Bay Community Credit Unionwww.ubccu.org989-892-4597United Federal Credit Unionunitedfcu.com269-982-1400United Financial Credit Unionwww.unitedfinancialcu.org989-777-3620United Guaranty Services, Inc. dba Arch Fulfillment Servicers mi.archcapgroup.com/MI-Servicing/Loss-Mitigation-and-Claims800-334-8966University Bankwww.university-bank.com734-741-5858University of Michigan Credit Unionwww.umcu.org734-662-8200Van Dyk Mortgage Corporation www.vandykmortgage.com616-940-3000Veterans United Home Loanswww.veteransunited.com573-876-2600Vibe Credit Unionwww.vibecreditunion.com248-735-9500Walled Lake Schools Federal Credit Unionwww.wlsefcu.com248-624-5222Waterstone Mortgagewww.waterstonemortgage.com800-354-1149West Michigan Credit Unionwestmichigancu.com616-451-4567West Shore Bankwww.westshorebank.com231-845-3500Western Districts Members Credit Unionwdmcu.org616-241-2516Wexford Community Credit Unionwww.wexccu.com231-775-2081Wildfire Credit Unionwildfirecu.org989-249-8200Wolverine State Credit Union www.wolverinescu.com989-356-1880Zeal Credit Unionwww.zealcu.org734-522-3700
Источник: https://www.michigan.gov/difs/0,5269,7-303-99549-526542--,00.html

Somogyi, et al. v. Freedom Mortgage Corp.

1. What is the Case and the Settlement About?

This class action lawsuit claims that FMC violated the Telephone Consumer Protection Act, 47 U.S.C. § 227, et seq. (“TCPA”) by improperly calling cellular or landline phones for marketing purposes without consent.  FMC denies that it violated the law or did anything wrong, and has asserted several defenses.  The Court has not ruled on the merits of the claims or defenses.  FMC has agreed to the proposed Settlement to end this Action.  Plaintiffs have agreed to the proposed Settlement to avoid the risks in continuing to litigate, including the risks that no class action may be certified by the Court, or that no recoveries may result.

Under the proposed Settlement, FMC will pay $9,500,000 (the “Settlement Amount”) into a non-reversionary fund (meaning that, if the Settlement is approved by the Court, FMC will not get any of those funds back regardless of how many Claim Forms are filed).  Also as an important part of the proposed Settlement, FMC will, within 180 days after the Settlement becomes effective: (a) designate a senior manager to be responsible for assuring FMC’s compliance with the TCPA who will report directly to the office of FMC’s Chief Executive Officer; (b) provide additional training concerning the TCPA’s do-not-call (“DNC”) lists to ensure that all FMC employees, as well as all external third-party vendors of FMC (including any newly hired such vendors) that make marketing calls for or on behalf of FMC, adhere to FMC’s DNC list; and (c) establish, maintain, and implement updated written procedures to facilitate TCPA compliance regarding DNC policies and DNC lists.  The proposed Settlement is subject to Court approval following a hearing.  This is not a complete description of the claims, defenses, or the Settlement.  The parties’ Settlement Agreement dated July 31, 2019 (the “Settlement Agreement”) contains the complete terms of the proposed Settlement.  A copy of the Settlement Agreement, the Notice, the Claim Form, and certain other documents related to this Action may be accessed in the 'Documents' section of this Website, or by contacting Settlement Class Counsel identified below.

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2. Why am I Receiving the Notice?

The Court in charge of this lawsuit has ordered that the Notice be sent to persons who are included in the Settlement Class to advise them of: (a) the terms of the proposed Settlement; (b) their rights concerning the proposed Settlement; and (c) their rights concerning a hearing to be held before the United States District Court for the District of New Jersey (the “Court”), at the Mitchell H. Cohen Building & U.S. Courthouse, 4th & Cooper Streets, Camden, NJ 08101 in Courtroom 3C on September 10, 2020 at 2:00 p.m. to consider the fairness, reasonableness and adequacy of the Settlement and the application for attorneys’ fees and reimbursement of litigation expenses and costs to Settlement Class Counsel and related matters (the “Final Approval Hearing”).  The time and date of the Final Approval Hearing may be changed by the Court without further notice to the Settlement Class.  The Notice also describes the steps to be taken by those who wish to be excluded from the Settlement Class and, for those who remain in the Settlement Class, the steps for them to seek to share in the distribution of the Net Settlement Amount if the Settlement is approved by the Court and they qualify to so share.  FMC, current and former affiliates and employees of FMC, the Judges who have presided over this Action, Plaintiffs’ lawyers in the Action, and their legal representatives, heirs, successors and assigns, may not participate in this Settlement or receive a payment.  Those persons who opt-out of this Settlement also may not participate in this Settlement. 

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3. What is the Plan to Allocate the Net Settlement Amount?

Settlement Class Members who submit timely and proper Claim Forms seeking to share in the Settlement are Authorized Claimants.  To be eligible to share in the Net Settlement Amount, Settlement Class Members must have received one or more marketing calls or voicemails from FMC or on behalf of FMC during the Class Period to which they did not consent.  For purposes of this Settlement, a marketing call includes any calls made by or on behalf of FMC to a Settlement Class Member in the Class Period to market or sell any of FMC’s mortgage products or services, such as to potentially refinance an existing mortgage the Settlement Class Member may have had.

Authorized Claimants will receive equal shares of the Net Settlement Amount (that is, the amount remaining in the Settlement Amount after all attorneys’ fees and other costs and expenses are paid subject to the Court’s approval). How much each Authorized Claimant receives will depend on how many people make valid and timely claims that are approved for payment, after deducting Settlement administration and attorneys’ fees and costs which are discussed below.  Only one payment per household is permitted.  Assuming that 10%, or 152,419, of the 1,524,198 total Settlement Class Members file valid and timely Claim Forms and that the Court awards the maximum in total attorneys’ fees and Settlement administration and other costs described below, those 152,419 Settlement Class Members would receive from the Settlement a payment of approximately $37.61 each.  This is only an estimate, however, and the actual amount could go up or down significantly depending on the number of valid and timely Claim Forms received and the total fees and costs awarded by the Court.  Settlement Class Members do not have to file any Claim Forms to benefit from the additional corporate compliance relief described above assuming the Court approves the Settlement. 

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4. What do I Give Up by Participating in the Settlement?

Each Settlement Class Member who does not file a valid and timely request to be excluded from the Settlement Class, regardless of whether they file a Claim Form, will be deemed to have forever released and discharged the “Released Parties” from the “Released Claims.”  “Released Parties” mean FMC and any and all of FMC’s past and present parents, partnerships, joint ventures, unincorporated entities, subsidiaries, divisions, affiliates and persons and entities directly or indirectly under their control in the past or in the present; FMC’s assignors, predecessors, successors and assigns; and any of their past or present employees, shareholders, agents, directors, officers, members, contractors, subcontractors, vendors, attorneys, insurers, accountants, representatives, heirs and the estates of any and all of the foregoing.  “Released Claims” mean any and all claims, liens, demands, actions, causes of action, obligations, damages or liabilities of any nature whatsoever that arose during the Class Period, whether legal or equitable or otherwise, that actually were, or could have been, asserted in the Action including those that arise from or relate to any communications, actions or inactions by the Released Parties allegedly in violation of any provision of the TCPA or its implementing regulations or any similar claims under state statutes or the common law, and any claim arising directly or indirectly out of, or in any way relating to, the claims that actually were, or could have been, asserted in the Action.  In addition, the Settlement provides that if it is approved by the Court and the releases provided for in the Settlement become effective, any person who thereafter knowingly brings a Released Claim against a Released Party shall pay the attorney’s fees and costs incurred by the defendant or other Released Party as a result of the violation.

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5. How do I Make a Settlement Claim?

A Claim Form is enclosed with the postcard Notice mailed to Settlement Class Members, a downloadable paper Claim Form is available in the 'Documents' section of this Website, and the online Claim Form is available by clicking 'Submit Claim' on the right-hand side of this webpage.  You can make a claim by completing and signing a Claim Form and sending it to the Settlement Administrator in one of the following ways:  (1) online through the 'Submit Claim' option; or (2) by mailing a completed postcard or paper Claim Form to: FMC Settlement, Somogyi v. Freedom Mortgage Corp., P.O. Box 400, Philadelphia, PA 19105-0400.  To make a claim, you will be required to provide: (a) your name, (b) your address and phone number, and (c) the thirteen (13) digit Class Member ID Number listed in the email Notice or below your address on the postcard Notice if you received the postcard Notice by mail.  You must submit a Claim Form to the Settlement Administrator no later than June 23, 2020.  If mailed, the submission must be postmarked no later than June 23, 2020. 

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6. Do I Have a Lawyer?

Plaintiffs and the Settlement Class are represented by the law firms of Berger Montague PC and Mahany Law Firm as Settlement Class Counsel, and the Law Offices of Stefan Coleman, P.A. as additional Plaintiffs’ counsel.  You will not be charged personally for these lawyers.  Instead, these lawyers will be paid from the Settlement Amount if the Settlement is approved by the Court as discussed more fully below.  You may, however, hire an attorney at your own expense to represent you and speak on your behalf at the Final Approval Hearing.  FMC’s attorneys in this Action is the law firm of Akin Gump Strauss Hauer & Feld LLP. 

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7. What Fees and Costs May be Deducted From the Settlement Amount?

Settlement Class Counsel on behalf of all Plaintiffs’ Counsel will ask the Court for an award of attorneys’ fees of up to one-third of the Settlement Amount, or $3,166,666.67, plus interest at the same rate earned by the Settlement Amount; reimbursement of litigation expenses and costs of up to $85,000; and a Service Award up to $5,000 each for Plaintiffs Joshua Somogyi, Kelly Whyle Somogyi and Stewart Sieleman, for their service in representing the Settlement Class in this Action.  Any such award of attorneys’ fees and costs and Service Awards will be paid from the Settlement Amount only after the Effective Date, and at the time the Court directs.  Notice and administration costs of up to $500,000 will also be paid out of the gross Settlement Amount.  Before selecting Heffler Claims Group (“Heffler”) as the Settlement Administrator subject to the Court’s approval, Settlement Class Counsel solicited and received and reviewed bids from several class action claims administration firms.  Settlement Class Counsel selected Heffler based on their overall evaluation of all of the bids received and estimated claims administration fees and costs.  Settlement Class Counsel will file with the Court and post on this Website their request for an award of attorneys’ fees and reimbursement of litigation costs and expenses, and the request for Service Awards for the Plaintiffs, by June 2, 2020. 

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8. How do I Exclude Myself From the Settlement?

Each Settlement Class Member will be bound by all determinations and judgments of the Court in this lawsuit, including those concerning the Settlement, whether favorable or unfavorable, unless such person mails a request for exclusion from the Settlement, by first-class mail addressed to:  FMC Settlement, Somogyi v. Freedom Mortgage Corp., P.O. Box 400, Philadelphia, PA 19105-0400.  The exclusion request must be postmarked no later than June 23, 2020.  Each request for exclusion must clearly indicate the name, address and telephone number of the person seeking exclusion; that the sender requests to be excluded from the Settlement Class in this Action; and must be signed personally by the Settlement Class Member seeking exclusion, even if they are represented by counsel.  Requests for exclusion must be submitted individually, and cannot be made en masse.  Any request for exclusion shall not be effective unless it provides the required information and is made within the time stated above, or the exclusion is otherwise accepted by the Court.  If you exclude yourself from the Settlement Class, you will not be able to participate in the Settlement or receive a payment from this Settlement.

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9. When and Where Will the Court Decide Whether to Approve the Settlement?

The Court will hold a hearing at 2:00 p.m. on September 10, 2020 at the United States District Court for the District of New Jersey, Mitchell H. Cohen Building & U.S. Courthouse, 4th & Cooper Streets, Camden, NJ  08101 in Courtroom 3C.  The purpose of the hearing will be for the Court to determine whether to approve the Settlement as fair, reasonable and adequate, and in the best interests of Settlement Class Members; to consider Settlement Class Counsel’s request for attorneys’ fees and reimbursement of costs and expenses; to consider a request to approve Service Awards to the Plaintiffs; and to consider any related matter.  At that hearing, the Court will be available to hear any objections and arguments concerning the fairness of the proposed Settlement, the application for attorneys’ fees and costs, the application for Service Awards for the Plaintiffs, and any other matter concerning the Settlement.

The hearing may be postponed to a different date or time without notice, so it is a good idea to check this Website or call 833-930-2424 in advance if you plan on attending.  If, however, you timely objected to the Settlement and advised the Court that you intend to appear and speak at the hearing, you should receive notice of any change in the date of such hearing, although you may still check the above sources as well.  Due to the evolving situation concerning COVID-19, the Court may decide to hold this Hearing telephonically, or to otherwise permit Settlement Class Members to participate in the Hearing telephonically.  In the event that the Court requires or permits telephonic participation in this Hearing, the dial-in number for the Hearing will be posted on this Website.  Interested Settlement Class Members should check this Website for that information prior to the Hearing.

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10. Do I Have to Come to the Hearing?

No.  Settlement Class Counsel will answer any questions the Court may have.  But, you are welcome to come at your own expense.  If you send an objection or comment, you don’t have to come to Court to talk about it.  As long as you filed and mailed your written objection on time, the Court will consider it.  You may also pay or otherwise have another lawyer attend for you, but it’s not required.  

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11. How Can I Object to the Settlement?

Any Settlement Class Member who does not request to be excluded from the Settlement may submit a written objection to the Settlement and may appear at the Final Approval Hearing if they wish to speak or show cause why the Agreement should not be approved as fair, reasonable and adequate, provided that they must first hand-deliver or serve by U.S. first class mail or by email, to (a) Plaintiffs’ Counsel care of Lawrence J. Lederer, Berger Montague PC, 1818 Market Street, Suite 3600, Philadelphia, PA 19103, email [email protected]; and (b) Defendant FMC’s counsel care of Michael McTigue, Akin Gump Strauss Hauer & Feld, LLP, Two Commerce Square, 2001 Market Street, Suite 4100, Philadelphia, PA 19103, email [email protected], written objections that state with specificity the grounds for any objection, such that they are postmarked by June 23, 2020.  All written objections must include:  (a) the case caption and the full name, address and telephone number of the objecting Settlement Class Member; (b) a written statement of all grounds for the objection accompanied by any legal support for the objection; (c) copies of any papers, briefs, exhibits, or other documents upon which the objection is based; (d) a list of all persons who will appear at the Final Approval Hearing in support of the objection; (e) a statement of whether the objector intends to appear at the Final Approval Hearing; and (f) the objector’s signature.  Any Settlement Class Member who does not make his or her objection in the manner provided herein shall be deemed to have waived such objection and shall be foreclosed from making any objection to any aspect of the Agreement, unless otherwise ordered by the Court.

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12. What if I Have a Question About the Settlement?

You can get more information about the Settlement by visiting all sections of this Website.  You can also contact the Settlement Administrator through the 'Contact' section of this Website or by calling toll free at 833-930-2424, or you may contact Plaintiffs’ Counsel care of Lawrence J. Lederer, Berger Montague PC, 1818 Market Street, Suite 3600, Philadelphia, PA 19103, email: [email protected]

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Источник: http://www.mortgagetcpasettlement.com/home/faqs/

Somogyi, et al. v. Freedom Mortgage Corp.

1. What is the Case and the Settlement About?

This class action lawsuit claims that FMC violated the Telephone Consumer Protection Act, 47 U.S.C. § 227, et seq. (“TCPA”) by improperly calling cellular or landline phones for marketing purposes without consent.  FMC denies that it violated the law or did anything wrong, and has asserted several defenses.  The Court has not ruled on the merits of the claims or defenses.  FMC has agreed to the proposed Settlement to end this Action.  Plaintiffs have agreed to the proposed Settlement to avoid the risks in continuing to litigate, including the risks that no class action may be certified by the Court, or that no recoveries may result.

Under the proposed Settlement, FMC will pay $9,500,000 (the “Settlement Amount”) into a non-reversionary fund (meaning that, if the Settlement is approved by the Court, FMC will not get any of those funds back regardless of how many Claim Forms are filed).  Also as an important part of the proposed Settlement, FMC will, within 180 days after the Settlement becomes effective: (a) designate a senior manager to be responsible for assuring FMC’s compliance with the TCPA who will report directly to the office of FMC’s Chief Executive Officer; (b) provide additional training concerning the TCPA’s do-not-call (“DNC”) lists to ensure that all FMC employees, as well as all external third-party vendors of FMC (including any newly hired such vendors) that make marketing calls for or on behalf of FMC, adhere to FMC’s DNC list; and (c) establish, maintain, and implement updated written target bangor maine hours to facilitate TCPA compliance regarding DNC policies and DNC lists.  The proposed Settlement is subject to Court approval following a hearing.  This is not a complete description of the claims, defenses, or the Settlement.  The parties’ Settlement Agreement dated July 31, 2019 (the “Settlement Agreement”) contains the complete terms of the proposed Settlement.  A copy of the Settlement Agreement, the Notice, the Claim Form, and certain other documents related to this Action may be accessed in the 'Documents' section of this Website, or by contacting Settlement Class Counsel identified below.

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2. Why am I Receiving the Notice?

The Court in charge of this lawsuit has ordered that the Notice be sent to persons who are included in the Settlement Class to advise them of: (a) the terms of the proposed Settlement; (b) their rights concerning the proposed Settlement; and (c) their rights concerning a hearing to be held before the United States District Court for the District of New Jersey (the “Court”), at the Mitchell H. Cohen Building & U.S. Courthouse, 4th & Cooper Streets, Camden, NJ 08101 in Chase bank branches indianapolis 3C on September 10, 2020 at 2:00 p.m. to consider the fairness, reasonableness and adequacy of the Settlement and the application for attorneys’ fees and reimbursement of litigation expenses and costs to Settlement Class First interstate arena and related matters (the “Final Approval Hearing”).  The time and date of the Final Approval Hearing may be changed by the Court without further notice to the Settlement Class.  The Notice also describes the steps to be taken by those who wish to be excluded from the Settlement Class and, for those who remain in the Settlement Class, the steps for them to seek to share in the distribution of the Net Settlement Amount if the Settlement is approved by the Court and they qualify to so share.  FMC, current and former affiliates and employees of FMC, the Judges who have presided over this Action, Plaintiffs’ lawyers in the Action, and their legal representatives, heirs, successors and assigns, may not participate in this Settlement or receive a payment.  Those persons who opt-out of this Settlement also may not participate in this Settlement. 

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3. What is the Https na amazon moment to Allocate the Net Settlement Amount?

Settlement Class Members who submit timely and proper Claim Forms seeking to share in the Settlement are Authorized Claimants.  To be eligible to share in the Net Settlement Amount, Settlement Class Members must have received one or more marketing calls or voicemails from FMC or on behalf of FMC during the Class Period to which they did not consent.  For purposes of this Settlement, a marketing call includes any calls made by or on behalf of FMC to a Settlement Class Member in the Class Period to market or sell any of FMC’s mortgage products or services, such as to potentially refinance an existing mortgage the Settlement Class Member may have had.

Authorized Claimants will receive equal shares of the Net Settlement Amount (that is, the amount remaining in the Settlement Amount after all attorneys’ fees and other costs and expenses are paid subject to the Court’s approval). How much each Authorized Claimant receives will depend on how many people make valid and timely claims that are approved for payment, after deducting Settlement administration and attorneys’ fees and costs which are discussed below.  Only one payment per household is permitted.  Assuming that 10%, or 152,419, of the 1,524,198 total Settlement Class Members file valid and timely Claim Forms and that the Court awards the maximum in total attorneys’ fees and Settlement administration and other costs described below, those 152,419 Settlement Class Members would receive from the Settlement a payment of approximately $37.61 each.  This is only an estimate, however, and the actual amount could go up or down significantly depending on the number of valid and timely Claim Forms received and the total fees and costs awarded by the Court.  Settlement Class Members do not have to file any Claim Forms to benefit from the additional corporate compliance relief described above assuming the Court approves the Settlement. 

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4. What do I Give Up by Participating in the Settlement?

Each Settlement Class Member who does not file a valid and timely request to be excluded from the Settlement Class, regardless of whether they file a Claim Form, will be deemed to have forever released and discharged the “Released Parties” from the “Released Claims.”  “Released Parties” mean FMC and any and all of FMC’s past and present parents, partnerships, joint ventures, unincorporated entities, subsidiaries, divisions, affiliates and persons and entities directly or indirectly under their control in the past or in the present; FMC’s assignors, predecessors, successors and assigns; and any of their past or present employees, shareholders, agents, directors, officers, members, contractors, subcontractors, vendors, attorneys, insurers, accountants, representatives, heirs and the estates of any and all of the foregoing.  “Released Claims” mean any and all claims, liens, demands, actions, causes of action, obligations, damages or liabilities of any nature whatsoever that arose during the Class Ameris bank pay mortgage online, whether legal or equitable or otherwise, that actually were, or could have been, asserted in the Action including those that arise from or relate to any communications, actions or inactions by the Released Parties allegedly in violation of any provision of the TCPA or its implementing regulations or any similar claims under state statutes or the common law, and any claim arising directly or indirectly out of, or in any way relating to, the claims that actually were, or could have been, asserted in the Action.  In addition, the Settlement provides that if it is approved by the Court and the releases provided for in the Settlement become effective, any person who thereafter knowingly brings a Released Claim against a Released Party shall pay the attorney’s fees and costs incurred by the defendant or other Released Party as a result of the violation.

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5. How do I Make a Settlement Claim?

A Claim Form is enclosed with the postcard Notice mailed to Settlement Class Members, a downloadable paper Claim Form is available in the 'Documents' section of this Website, and the online Claim Form is available by clicking 'Submit Claim' on the right-hand side of this webpage.  You can make a claim by completing and signing a Claim Form and sending it to the Settlement Administrator in one of the following ways:  (1) online through the 'Submit Claim' option; or (2) by mailing a completed postcard or paper Claim Form to: FMC Settlement, Somogyi v. Freedom Mortgage Corp., P.O. Box 400, Philadelphia, PA 19105-0400.  To make a claim, you will be required to provide: (a) your name, (b) your address and phone number, and (c) the thirteen (13) digit Class Member ID Number listed in the email Notice or below your address on the postcard Notice if you received the postcard Notice by mail.  You must submit a Claim Form to the Settlement Administrator no later than June 23, 2020.  If mailed, the submission must be postmarked no later than June 23, 2020. 

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6. Do I Have a Lawyer?

Plaintiffs and the Settlement Class are represented by the law firms of Www hdfc net banking login page Montague PC and Mahany Law Firm as Settlement Class Counsel, and the Law Offices of Stefan Coleman, P.A. as additional Plaintiffs’ counsel.  You will not be charged personally for these lawyers.  Instead, these lawyers will be paid from the Settlement Amount if the Settlement is approved by the Court as discussed more fully below.  You may, however, hire an attorney at your own expense to represent you and speak on your behalf at the Final Approval Hearing.  FMC’s attorneys in this Action is the law firm of Akin Gump Strauss Hauer & Feld LLP. 

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7. What Fees and Costs May be Deducted From the Settlement Amount?

Settlement Class Counsel on behalf of all Plaintiffs’ Counsel will ask the Court for an award of attorneys’ fees of up to one-third of the Settlement Amount, or $3,166,666.67, plus interest at the same rate earned by the Settlement Amount; reimbursement of litigation expenses and costs of up to $85,000; and a Service Award up to $5,000 each for Plaintiffs Joshua Somogyi, Kelly Whyle Somogyi and Stewart Sieleman, for their service in representing the Settlement Class in this Action.  Any such award of attorneys’ fees and costs and Service Awards will be paid from the Settlement Amount only after the Effective Date, and at the time the Court directs.  Notice and administration costs of up to $500,000 will also be paid out of the gross Settlement Amount.  Before selecting Heffler Claims Group (“Heffler”) as the Settlement Administrator subject to the Court’s approval, Settlement Class Counsel solicited and received and reviewed bids from several class action claims administration firms.  Settlement Class Counsel selected Heffler based on their overall evaluation of all of the bids received and estimated claims administration fees and costs.  Settlement Class Counsel will file with the Court and post on this Website their request for an award of attorneys’ fees and reimbursement of litigation costs and expenses, and the request for Service Awards for the Plaintiffs, by June 2, 2020. 

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8. How do I Exclude Myself From the Walmart money card number Settlement Class Member will be bound by all determinations and judgments of the Court in this lawsuit, including those concerning the Settlement, whether favorable or unfavorable, unless such person mails a request for exclusion from the Settlement, by first-class mail addressed to:  FMC Settlement, Somogyi v. Freedom Mortgage Corp., P.O. Box 400, Philadelphia, PA 19105-0400.  The exclusion request must be postmarked no later than June 23, 2020.  Each request for exclusion must clearly indicate the name, address and telephone number of the person seeking exclusion; that the sender requests to be excluded from the Settlement Class in this Action; and must be signed personally by the Settlement Class Member seeking exclusion, even if they are represented by counsel.  Requests for exclusion must be submitted individually, and cannot be made en masse.  Any request for exclusion shall not be effective unless it provides the required information and is made within the time stated above, or the exclusion is otherwise accepted by the Court.  If you exclude yourself from the Settlement Class, you will not be able to participate in the Settlement or receive a payment from this Settlement.

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9. When and Where Will the Court Decide Whether to Approve the Settlement?

The Court will hold a hearing at 2:00 p.m. on September 10, 2020 at the United States District Court for the District of New Jersey, Mitchell H. Cohen Building & U.S. Courthouse, 4th & Cooper Streets, Camden, NJ  08101 in Courtroom 3C.  The purpose of the hearing will be for the Court to determine whether to approve the Settlement as fair, reasonable and adequate, and in the best interests of Settlement Class Members; to consider Settlement Class Counsel’s request for attorneys’ fees and reimbursement of costs and expenses; to consider a request to approve Service Awards to the Plaintiffs; and to consider any related matter.  At that hearing, the Court will be available to hear any objections and arguments concerning the fairness of the proposed Settlement, the application for attorneys’ fees and costs, the application for Service Awards for the Plaintiffs, and any other matter concerning the Settlement.

The hearing may be postponed to a different date or time without notice, so it is a good idea to check this Website or call 833-930-2424 in advance if you plan on attending.  If, however, you timely objected to the Settlement and advised the Court that you intend to appear and speak at the hearing, you should receive notice of any change in the date of such hearing, although you may still check the above sources as well.  Due to the evolving situation concerning COVID-19, the Court may decide to hold this Hearing telephonically, or to otherwise permit Settlement Class Members to participate in the Hearing telephonically.  In the event that the Court requires or permits telephonic participation in this Hearing, the dial-in number for the Hearing will be posted on this Website.  Interested Settlement Class Members should check this Website for that information prior to the Hearing.

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10. Do I Have to Come to the Hearing?

No.  Settlement Class Counsel will answer any questions the Court may have.  But, you are welcome to come at your own expense.  If you send an objection or comment, you don’t have to come to Court to talk about it.  As long as you filed and mailed your written objection on time, the Court will consider it.  You may also pay or otherwise have another lawyer attend for you, but it’s not required.  

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11. How Dollar tree rockland ma I Object to the Settlement?

Any Settlement Class Member who does not request to be excluded from the Settlement may submit a written objection to the Settlement and may appear at the Final Approval Hearing if they wish to speak or show cause why the Agreement should not be approved as fair, reasonable and adequate, provided that they must first hand-deliver or serve by U.S. first class mail or by email, to (a) Plaintiffs’ Counsel care of Lawrence J. Lederer, Berger Montague PC, 1818 Market Street, Suite 3600, Philadelphia, PA 19103, email [email protected]; and (b) Defendant FMC’s counsel care of Michael McTigue, Akin Gump Strauss Hauer & Feld, LLP, Two Commerce Square, 2001 Market Street, Suite 4100, Philadelphia, PA 19103, email [email protected], written objections that state with specificity the grounds for any objection, such movie samantha an american girl holiday they are postmarked by June 23, 2020.  All written objections must include:  (a) the case caption and the full name, address and telephone number of the objecting Settlement Class Member; (b) a written statement of all grounds for the objection accompanied by any legal support for the objection; (c) copies of any papers, briefs, exhibits, or other documents upon which the objection is based; (d) a list of all persons who will appear at the Final Approval Hearing in support of the objection; (e) a statement of whether the objector intends to appear at the Final Approval Hearing; and (f) the objector’s signature.  Any Settlement Class Member who does not make his or her objection in the manner provided herein shall be deemed to have waived such objection and shall be foreclosed from making any objection to any aspect of the Agreement, unless otherwise ordered by the Court.

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12. What if I Have a Question About the Settlement?

You can get more information about the Settlement by visiting all sections of this Website.  You can also contact the Settlement Administrator through the 'Contact' section of this Website or by calling toll free at 833-930-2424, or you may contact Plaintiffs’ Counsel care of Lawrence J. Lederer, Berger Montague PC, 1818 Market Street, Suite 3600, Philadelphia, PA 19103, freedom mortgage address for payments [email protected]

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Источник: http://www.mortgagetcpasettlement.com/home/faqs/
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Источник: https://www.michigan.gov/difs/0,5269,7-303-99549-526542--,00.html

Freedom Mortgage Corp. v. Engel

Freedom Mtge. Corp. v Engel 2021 NY Slip Op 01090 Decided on February 18, 2021 Court of Appeals DiFiore, J. Published by New York State Law Reporting Bureau pursuant to Judiciary Law § 431. This opinion is uncorrected and subject to revision before publication in the Official Reports.

Decided on February 18, 2021
No. 1
No. 2
No. 3
No. 4

[*1]Freedom Mortgage Corporation, Appellant,

v

Herschel Engel, Respondent, et al., Defendants. No. 2



Ditech Financial, LLC, & c., Appellant,

v

Santhana Kumar Nataraja Naidu, Respondent, et al., Defendants.



Juan Vargas, Respondent,

v

Deutsche Bank National Trust Company, Appellant.



Wells Fargo Bank, N.A., & c., Appellant, [*2]

v

Donna Ferrato, Respondent, The Simon & Mills Building Condominium Board, et al., Defendants.



Wells Fargo Bank, N.A., & c., Appellant,

v

Donna Ferrato, Respondent, Capital One Bank (USA) N.A., et al., Defendants.



Case No. 1:

Brian A. Sutherland, for appellant.

Anthony R. Filosa, for respondent.

Legal Services NYC, et al., American Legal and Financial Network, New Prefab shipping container homes for sale in north carolina State Foreclosure Defense Bar, New York Mortgage Bankers Association, USFN - America's Mortgage Banking Attorneys, United Jewish Organizations of Williamsburg, Inc., amici curiae.

Case No. 2:

Christina A. Livorsi, for appellant.

Holly C. Meyer, for respondent.

New York State Foreclosure Defense Bar, United Jewish Organizations of Williamsburg, Inc., Adam Plotch, amici curiae.

Case No. 3:

Patrick Broderick, for appellant.

Justin F. Pane, for respondent.

Francis M. Caesar, New York State Foreclosure Defense Bar, United Jewish Organizations of Williamsburg, Inc., Adam Plotch, amici curiae.

Case No. 4:

Brian S. Pantaleo, for appellant.

M. Katherine Sherman, for respondent.

Francis M. Caesar, New York State Foreclosure Defense Bar, amici curiae.




DiFIORE, Chief Judge:

These appeals—each turning on the timeliness of a mortgage foreclosure claim—

involve the intersection of two areas of law where the need for clarity and consistency are at their zenith: contracts affecting real property ownership and the application of the statute of limitations. In Vargas v Deutsche Bank Natl. Trust Co. and Wells Fargo Bank, N.A. v Ferrato, the primary issue is when the maturity of the debt was accelerated, commencing the six-year statute of limitations period. Applying the long-standing rule derived from Albertina Realty Co. v Rosbro Realty Corp. (258 NY 472 [1932]) that a noteholder must effect an "unequivocal overt act" to accomplish such a substantial change in the parties' contractual relationship, we reject the argument in Vargas that the default letter in question accelerated the debt, and similarly conclude in Wells Fargo that two complaints in prior discontinued foreclosure actions that each failed to reference the pertinent modified loan likewise were not sufficient to constitute a valid acceleration. The remaining cases turn on whether the noteholder's voluntary discontinuance of a prior foreclosure action revoked acceleration of the debt, reinstating the borrower's contractual right to repay the loan over time in installments. Adopting a clear rule that will be easily understood by the parties and can be consistently applied by the courts, we hold that where the maturity of the debt has been validly accelerated by commencement of a foreclosure action, the noteholder's voluntary withdrawal of that action revokes the election to accelerate, absent the noteholder's contemporaneous statement to the contrary. These conclusions compel a reversal of the Appellate Division order in each case.

The parties do not dispute that under CPLR 213 (4), a mortgage foreclosure claim is governed by a six-year statute of limitations (see Lubonty v U.S. Bank N. A., 34 NY3d 250, 261 [2019])—in each case, the timeliness dispute turns on whether or when the noteholders exercised certain rights under the relevant contracts, impacting when each claim accrued and whether the limitations period expired, barring the noteholders' foreclosure claims. Because these cases involve the operation of the statute of limitations, we begin with some general principles. We have repeatedly recognized the important objectives of certainty and predictability served by our statutes of limitations and freedom mortgage address for payments by our principles of contract law, particularly where the bargain struck between the parties involves real property (see ACE Sec. Corp., Home Equity Loan Trust, Series 2006-SL2 v DB Structured Prods., Inc., 25 NY3d 581, 593 [2015]). Statutes of limitations advance our society's interest in "giving repose to human affairs" (John J. Kassner & Co. v City of New York, 46 NY2d 544, 550 [1979] [citations omitted]). Our rules governing contract interpretation—the principle that agreements should be enforced pursuant to their clear terms—similarly promotes stability and predictability according to the expectations of the parties (see 159 MP Corp. v Redbridge Bedford, LLC, 33 NY3d 353, 358 [2019]). This Court has emphasized the need for reliable and objective rules permitting consistent application of the statute of limitations to claims arising from commercial relationships (see ACE Sec. Corp., 25 NY3d at 593-594, citing Ely-Cruikshank Co. v Bank of Montreal, 81 NY2d 399, 403 [1993]; Ajdler v Province of Mendoza, 33 NY3d 120, 130 n 6 [2019]).

Whether a foreclosure claim is timely cannot be ascertained without an understanding of the parties' respective rights and obligations under the operative contracts: the note and the mortgage. The noteholder's ability to foreclose on the property securing the debt depends on the language in these documents (see Nomura Home Equity Loan, Inc., Series 2006-FM2 v Nomura Credit & Capital, Inc., 30 NY3d 572, 581 [2017]; W.W.W. Assoc. v Giancontieri, 77 NY2d 157, 162-163 [1990]). In the residential mortgage industry, the use of standardized instruments is common, as reflected here where the relevant terms of the operative agreements are alike,[FN1] facilitating a general discussion of the operation of the statute of limitations with respect to claims arising from agreements of this nature. In each case before us, the note and mortgage create a relationship typical in the residential mortgage foreclosure context: in exchange for the opportunity to purchase a home, the borrower promised to repay a loan in favor of the noteholder, secured by a lien on that real property, over a 30-year extended term through a series of monthly installment payments. As prescribed in the agreements, the borrower's failure to timely make monthly installment payments constituted a default.

For over a century, residential mortgage contracts have typically provided noteholders the right to accelerate the maturity date of the loan upon the borrower's default, thereby demanding immediate repayment of the entire outstanding debt (see e.g., Odell v Hoyt, 73 NY 343, 345 [1878]). In these cases, the mortgages provide that the noteholder "may" require immediate payment of the outstanding debt—i.e., accelerate the maturity of the loan—upon the borrower's default [FN2]. It is plain from this language that whether to exercise this contractual right is a matter within the noteholder's discretion—the noteholder is not obliged to accelerate the loan upon a default (Adler v Berkowitz, 254 NY 433, 436 [1930]). The extended contractual relationship explains why residential mortgage agreements are generally structured in this way. Noteholders can—and often do—anticipate and tolerate defaults relating to timely payment, permitting the borrower www ucbi com georgia correct such deficiencies without a significant disturbance in the contractual relationship. Precipitous acceleration of the debt serves neither party as it works a fundamental alteration of the status quo.

Indeed, a noteholder's election to accelerate the entire debt has multiple, significant effects. Particularly relevant to these appeals, under the typical contract, acceleration permits the noteholder to commence an freedom mortgage address for payments seeking the remedy of full foreclosure (see Odell, 73 NY at 345)—an equitable tool permitting the noteholder to take possession of the real property securing the debt (Copp v Sands Point Mar., 17 NY2d 291, 293 [1966]). Accordingly, a cause of action to recover the entire balance of the debt accrues at the time the loan is accelerated, triggering the blackberry key2 apn settings statute of limitations to commence a foreclosure action (see CPLR 203[a], 213[4]; Phoenix Acquisition Corp. v Campcore, Inc., 81 NY2d 138, 143 [1993]; Lubonty, 34 NY3d at 261; see also CDR Créances S.A. v Euro-American Lodging Corp., 43 AD3d 45, 51 [1st Dept 2007]; EMC Mtge. Corp. v Patella, 279 AD2d 604, 605 [2d Dept 2001]; Lavin v Elmakiss, 302 AD2d 638, 639 [3d Dept 2003]; Business Loan Ctr., Inc. v Wagner, 31 AD3d 1122, 1123 [4th Dept 2006])[FN3]. Acceleration is therefore a significant event for statute of limitations purposes and, in two of these appeals, the timeliness dispute turns on whether certain acts—in Wells Fargo, the filing of complaints in prior foreclosure actions and, in Vargas, the issuance of a default letter—effectuated an acceleration of the indebtedness, starting the clock on the noteholders' claims.

I.

We have had few occasions to address how a lender may effectuate an acceleration of the maturity of a debt secured on real property. However, in Albertina Realty Co., we made clear that any election to accelerate must be made in accordance with the terms of the note and mortgage and that the parties are free to include provisions detailing what the noteholder must do to accelerate the debt (258 NY at 475-476). First citizens bank online statements further held that, to be valid, an election to accelerate must be made by an "unequivocal overt act" that discloses the noteholder's choice, such as the filing of a verified complaint seeking foreclosure and containing a sworn statement that the noteholder is demanding repayment of the entire outstanding debt (id. at 476). Although the Court did not otherwise decide "just what a holder of a mortgage must do to exercise the right of election, under an acceleration clause," it did clarify that "[t]he fact of election should not be confused with the notice or manifestation of such election" (id.). While the act evincing the noteholder's election must be sufficient to "constitute[] notice to all third parties of such [a] choice," a borrower's lack of actual notice "d[oes] not as a matter of law destroy" the effect of the election (id.). Put another way, the point at which a borrower has actual notice of an election to accelerate is not the operative event for purposes of determining when the statute of limitations begins to run. Indeed, in Albertina, we held that the debt was accelerated when the verified complaint and lis pendens were filed, even though the papers had not yet been served [*3]on the borrower (id.). The determinative question is not what the noteholder intended or the borrower perceived, but whether the contractual election was effectively invoked.

There are sound policy reasons to require that an acceleration be accomplished by an "unequivocal overt act." Acceleration in this context is a demand for payment of the outstanding loan in full that terminates the borrower's right to repay the debt over time through the vehicle of monthly installment payments (although the contracts may provide the borrower the right to cure) (see Federal Natl. Mtge. Assn. v Mebane, 208 AD2d 892, 894 [2d Dept 1994]). Such a significant alteration of the borrower's obligations under the contract—replacing the right to make recurring payments of perhaps united community bank covington ga few thousand dollars a month or less with a demand for immediate payment of a lump sum of hundreds of thousands of dollars—should not be presumed or inferred; noteholders must unequivocally and overtly exercise an election to accelerate. With these principles in mind, we turn to the two appeals before us in which the parties dispute whether, and when, a valid acceleration of the debt occurred, triggering the six-year limitations period to commence a foreclosure claim.

Wells Fargo

The central issue in Wells Fargo is whether the commencement of either of two prior, dismissed foreclosure actions constituted a valid acceleration, impacting the timeliness of this foreclosure action (the fifth involving this property),[FN4] which was commenced in December 2017. Over ten years ago, borrower Donna Ferrato allegedly defaulted on a $900,000 loan secured by a mortgage on her Manhattan condominium unit. Upon Wells Fargo's initiation of this foreclosure action, Ferrato moved to dismiss, arguing that the debt was accelerated in September 2009 by the commencement of the second foreclosure action and the limitations period therefore expired six years later, in September 2015. Supreme Court denied Ferrato's motion, concluding that neither the second nor the third foreclosure actions—commenced in 2009 and 2011, respectively—validly accelerated the debt because, as Ferrato had successfully argued in Supreme Court in those actions, the complaints reflected an attempt to foreclose upon the original note and mortgage even though the terms of that note had been modified (increasing the debt and changing the interest rate) in 2008. On Ferrato's appeal, the Appellate Division (among other things) reversed and granted her motion to dismiss, reasoning that the September 2009 complaint effected a valid acceleration of the modified loan despite the failure to reference the correct loan documents [FN5]. The Appellate Division granted Wells Fargo leave to appeal to this Court and, because we agree with Wells Fargo that the modified loan debt which it now seeks to enforce could not have been accelerated by the complaints filed in the second (or, for that matter, third) foreclosure action which failed to reference the modified note, we reverse the portion of the Appellate Division order granting Ferrato's motion to dismiss the complaint in the fifth foreclosure action and deny that motion.

It is undisputed that the parties modified the original loan in 2008 after Ferrato's initial default, changing the terms by altering the interest rate and increasing the principal amount of the loan by more than $60,000. Nevertheless, in the second foreclosure action on which Ferrato relies, Wells Fargo attached only the original note and mortgage (stating a principal amount of $900,000) to the complaint and failed to acknowledge that the parties entered into a modification agreement altering the amount and terms of the loans (the only oblique evidence of a modification was in an attached schedule stating a principal dollar amount consistent with the modified debt). Although Ferrato successfully moved to dismiss both prior actions on the basis that these deficiencies precluded [*4]Wells Fargo from foreclosing on her property, she now asserts that the filing of those complaints validly accelerated the debt. It is well-settled that the filing of a verified foreclosure complaint may evince an election to accelerate (see Albertina, 258 NY at 476), but here the filings did not accelerate the modified loan (underlying the current foreclosure action) because the bank failed to attach the modified agreements or otherwise acknowledge those documents, which had materially distinct terms. Under these circumstances—where the deficiencies in the complaints were not merely technical or de minimis and rendered it unclear what debt was being accelerated—the commencement of these actions did not validly accelerate the modified loan (Albertina Realty Co., 258 NY2d at 476)[FN6]. Because Ferrato did not identify any other acceleration event occurring more than six years prior to the commencement of the fifth foreclosure action, the Appellate Division erred in granting her motion to dismiss that action as untimely.

Vargas

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In Vargas, an action under RPAPL 1501 (4) to discharge a mortgage on real property commenced by borrower Juan Vargas against noteholder Deutsche Bank,[FN7] the parties dispute whether a default letter issued by the bank's predecessor-in-interest validly accelerated the debt. New York courts have observed, consistent with Albertina, that the acceleration of a mortgage debt may occur by means other than the commencement of a foreclosure action, such as through an unequivocal acceleration notice transmitted to the borrower (see Mejias v Wells Fargo N.A., 186 AD3d 472, 474 [2d Dept 2020]; Lavin, 302 AD2d at 638-639). However, the Appellate Division departments disagree on the language necessary to render a letter sufficiently unequivocal to constitute a valid election to accelerate. In Deutsche Bank Natl. Trust Co. v Royal Blue Realty Holdings, Inc. (148 AD3d 529 [1st Dept 2017]), the First Department concluded that a letter stating that the noteholder "will" accelerate upon the borrower's failure to cure the default constituted clear and unequivocal notice of an acceleration that became effective upon the expiration of the cure period. But the Second Department has rejected that view (see e.g., Milone v US Bank N.A.,164 AD3d 145 [2d Dept 2018]; 21st Mtge. Corp. v Adames, 153 AD3d 474 [2d Dept 2017]), reasoning that comparable language did not accelerate the debt and was "merely an expression of future intent that fell short of an actual acceleration," which could "be changed in the interim" (Milone, 164 AD3d at 152). This disagreement is at the heart of the parties' dispute in Vargas.

Vargas commenced this quiet title action against Deutsche Bank in July 2016, seeking to cancel a $308,000 mortgage on residential property in the Bronx, contending the statute of limitations for any claim to foreclose on the mortgage had expired. Deutsche Bank moved to dismiss and, in opposition, Vargas argued that an August 2008 default letter sent by the bank's predecessor-in-interest [FN8] had accelerated the debt and that the limitations period had expired before commencement of the quiet title action. Supreme Court initially rejected that contention, reasoning that the default letter was insufficient in itself to constitute an election to accelerate. However, on renewal, the court reversed course, denied Deutsche Bank's motion to dismiss and granted summary judgment to Vargas, declaring the mortgage unenforceable and the property free from any encumbrances. The Appellate Division affirmed, deeming the letter a valid acceleration pursuant to Royal Blue Realty, and we granted Deutsche Bank leave to appeal (34 NY3d 910 [2020]).

It is undisputed that the August 2008 default letter was sent to Vargas—the only question is whether it effectuated a clear and unequivocal acceleration of the debt, an issue of law. The default letter informed Vargas that his loan was in "serious default" because he had not made his "required payments," but that he could cure the default by paying approximately $8,000 "on or before 32 days from the date of [the] letter." It further advised that, should he fail to cure his default, the noteholder "will accelerate [his] mortgage with the full amount remaining accelerated and becoming due and payable in full, and foreclosure proceedings will be initiated at that time." The letter warned: "[f]ailure to cure your default may result in the foreclosure and sale of your property."

We reject Vargas's contention that the August 2008 letter accelerated the debt and we therefore reverse the Appellate Division order, deny plaintiff's motion for summary judgment and grant Deutsche Bank's motion to dismiss. First and foremost, the letter did not seek immediate payment of the entire, outstanding loan, but referred to acceleration only as a future event, indicating the debt was not accelerated at the time the letter was written. Nor was this letter a pledge that acceleration would immediately or automatically occur upon expiration of the 32-day cure period. Indeed, an automatic acceleration upon expiration of the cure period could be considered inconsistent with the terms of the parties' contract, which gave the noteholder an optional, discretionary right to accelerate upon a default and satisfaction of certain conditions enumerated in the agreement. Although the letter states that the debt "will [be] accelerate[d]" if Vargas failed to cure the default within the cure period, it subsequently makes clear that the failure to cure "may" result in the foreclosure of 1st financial federal credit union routing number property, indicating that it was far from certain that either the acceleration or foreclosure action would follow, let alone ensue immediately at the close of the 32-day period.

This case demonstrates why acceleration should not be deemed to occur absent an overt, unequivocal act. Noteholders should be free to accurately inform borrowers of their default, the steps required for freedom mortgage address for payments cure and the practical consequences if the borrower fails to act, without running the risk of being deemed to have taken the drastic step of accelerating the loan. Even in the event of a continuing default, default notices provide an opportunity for pre-acceleration negotiation—giving both parties the breathing room to discuss loan modification or otherwise devise a plan to help the borrower achieve payment currency, without diminishing the noteholder's time to commence an action to foreclose on the real property, which should be a last resort.

In Freedom Mortgage and Ditech, walmart money card number issue is not whether or when the

debt was accelerated but whether a valid election to accelerate, effectuated by the commencement of a prior foreclosure action, was revoked upon the noteholder's voluntary discontinuance of that action. More than a century ago, in Kilpatrick v Germania Life Ins. Co. (83 NY 163, 168 [1905]), this Court addressed whether a noteholder who had exercised its discretionary option to accelerate the maturity of a debt pursuant to the terms of a mortgage could revoke that acceleration. We held that the noteholder's acceleration "became final and irrevocable" only after the borrower changed his position in reliance on that election by executing a new mortgage, applying an equitable estoppel analysis (id.).

Practically, the noteholder's act of revocation (also referred to as a de-acceleration) returns the parties to their pre-acceleration rights and obligations—reinstating the borrowers' right to repay any arrears and resume satisfaction of the loan over time via installments, i.e., removing the obligation to immediately repay the total outstanding balance due on the loan, and provides borrowers a renewed opportunity to remain in their homes, despite a prior default. Thus, following a de-acceleration, a payment default could give rise to an action on the note to collect missed installments (an action with a six-year statute of limitations that runs on each installment from the date it was due). Or the noteholder might again accelerate the maturity of the then-outstanding debt, at which point a new foreclosure claim on that outstanding debt would accrue with a six-year limitations period. Determining whether, and when, a noteholder revoked an election to accelerate can be critical to determining whether a foreclosure action commenced more than six years after acceleration is time-barred. In opposition to motions to dismiss, Freedom Mortgage and Ditech asserted that their foreclosure actions were timely because they had revoked prior elections to accelerate by voluntarily withdrawing those actions. In response, the borrowers did not dispute the noteholders' right to revoke but contended a voluntary discontinuance does not revoke an acceleration.

Although this Court has never addressed what constitutes a revocation in this context, the Appellate Division online lending house have consistently held that, absent a provision in the operative agreements setting forth precisely what a noteholder must do to revoke an election to accelerate, revocation can be accomplished by an "affirmative act" of the noteholder within six years of the election to accelerate (NMNT Realty Corp. v Knoxville 2012 Trust, 151 AD3d 1068, 1069 [2nd Dept 2017]; Lavin, 302 AD2d at 639; Federal Natl. Mtge. Koi trice. v Rosenberg, 180 AD3d 401, 402 [1st Dept 2020]). For example, an express statement in a forbearance agreement that the noteholder is revoking its [*5]prior acceleration and reinstating 1st financial federal credit union routing number borrower's right to pay in monthly installments has been deemed an "affirmative act" of de-acceleration (see U.S. Bank Trust, N.A. v Rudick, 172 AD3d 1430, 1430-1431 [1st Dept 2019]). However, no clear rule has emerged with respect to the issue raised here—whether a noteholder's voluntary motion or stipulation to discontinue a mortgage foreclosure action, which does not expressly mention de-acceleration or a willingness to accept installment payments, constitutes a sufficiently "affirmative act." Prior to 2017, without grape pips are good for you from the Appellate Division, multiple trial courts had concluded that a noteholder's voluntary withdrawal of its foreclosure action was an affirmative act of revocation as a matter of law (see e.g., 4 Cosgrove 950 Corp. v Deutsche Bank Natl. Trust Co., 2016 WL 2839341, *1-4, 2016 NY Misc LEXIS 44901, *2-5 [Sup Ct, NY County, May 10, 2016]; see also U.S. Bank Trust, N.A. v Adhami, 2019 WL 486086, *5-6 and n 7, 2019 US Dist LEXIS 19599,*12-13 and n 7 [ED NY, Feb. 6, 2019, No. 18-CV-530 (PKC) (AKT)] [collecting cases]).

In 2017, the Second Department first addressed this issue in NMNT Realty (151 AD3d 1068), denying a borrower's summary judgment motion to quiet title spirit airlines phone number usa the rationale that the noteholder's motion to discontinue a prior foreclosure action raised a "triable issue of fact" as to whether the prior acceleration had been revoked [FN9]. The First Department has, at times, articulated the same rule (see Capital One, N.A. v Saglimbeni, 170 AD3d 508, 509 [1st Dept 2019]; U.S. Bank N.A. v Charles, 173 AD3d 564, 565 [1st Dept 2019]). However, more recently, as reflected in the Second Department's decisions in Freedom Mortgage and Ditech (among other cases), a different rule has emerged—that a noteholder's motion or stipulation to withdraw a foreclosure action, "in itself," is not an affirmative act of revocation of the freedom mortgage address for payments effectuated via the complaint (see Freedom Mtge. Corp., 163 AD3 631, 633 [2d Dept 2018]; Ditech, 175 AD3d 1387, 1389 [2d Dept 2018]; Wells Fargo Bank, N.A. v Liburd, 176 AD3d 464, 464-465 [1st Dept 2019]). Both approaches require courts to scrutinize the course of the parties' post-discontinuance conduct and correspondence, to the extent raised, to determine whether a noteholder meant to revoke the acceleration when it discontinued the action (see e.g., Vargas, 168 AD3d 630, 630 [1st Dept 2019]). For example, in Christiana Trust v Barua (184 AD3d 140, 149 [2d Dept 2020])—after determining that the voluntary discontinuance was of no effect under the more recent approach described above—the court faulted the bank for failing to come forward with evidence that, after the discontinuance, it demanded resumption of monthly payments, invoiced the borrower for such payments, or otherwise demonstrated "it was truly seeking to de-accelerate the debt". Thus, the court suggested that the revocation inquiry turns on an exploration into the bank's intent, accomplished through an exhaustive examination of post-discontinuance acts.

This approach is both analytically unsound as a matter of contract law and unworkable from a practical standpoint. As is true with respect to the invocation of other contractual rights, either the noteholder's act constituted a valid revocation or it did not; what occurred thereafter may shed some light on the parties' perception of the event but it cannot retroactively alter the character or efficacy of the prior act. Indeed, where the contract requires a pre-acceleration default notice with an opportunity to cure, a post-discontinuance letter sent by the noteholder that references the then-outstanding total debt and seeks immediate repayment of the loan is not necessarily evidence that the prior voluntary discontinuance did not revoke acceleration—it is just as likely an indication that it did and the noteholder is again electing to accelerate due to the borrower's failure to cure a default. The impetus behind the requirements that an action be unequivocal and overt in order to constitute a valid acceleration and sufficiently affirmative to effectuate a revocation is that these events significantly impact the nature of the parties' respective performance obligations. A rule that requires post-hoc evaluation of events occurring after the voluntary [*6]discontinuance—correspondence between the parties, payment practices and the like—in order to determine whether a revocation previously occurred leaves the parties without concrete contemporaneous guidance as to their current contractual obligations, resulting in confusion that is likely to lead (perhaps inadvertently) to a breach, either because the borrower does not know that the obligation to make installment payments has resumed or the noteholder is unaware that it must accept a timely installment if tendered.

Indeed, if the effect of a voluntary discontinuance of a mortgage foreclosure action depended solely on the significance of noteholders' actions taking place months (if not years) later, parties might not have clarity with respect to their post-discontinuance contractual obligations until the issue was adjudicated in a subsequent foreclosure action (which is what occurred here); in both Freedom Mortgage and Ditech, the Appellate Division disagreed with Supreme Court's determinations that the prior accelerations had been revoked by the voluntary discontinuance. Not only is this approach harmful to the parties but it is incompatible with the policy underlying the statute of limitations because—under the post-hoc, case-by-case approach adopted by the Appellate Division—the timeliness of a foreclosure action "cannot be ascertained with any degree of certainty," an outcome which this Court has repeatedly disfavored (ACE Sec. Corp., 25 NY3d at 593-594). Further, the Appellate Division's recent approach suggests that a noteholder can retroactively control the effect of a voluntary discontinuance through correspondence it sends to the borrower after the case is withdrawn (which injects an opportunity for gamesmanship). We decline to adopt such a rule.

Rather, we are persuaded that, when a bank effectuated an acceleration via the commencement of a foreclosure action, a voluntary discontinuance of that action—i.e., the withdrawal of the complaint—constitutes a revocation of chime mobile banking reviews acceleration. In such a circumstance, the noteholder's withdrawal of its only demand for immediate payment of the full outstanding debt, made by the "unequivocal overt act" of filing a foreclosure complaint, "destroy[s] the effect" of the election (see Albertina, 258 NY at 476). We disagree with the Appellate Division's characterization of such a stipulation as "silent" with respect to revocation (Freedom Mtge. Corp., 163 AD3d at 633). A voluntary discontinuance withdraws the complaint and, when the complaint is the only expression of a demand for immediate payment of the entire debt, this is the functional equivalent of a statement by the lender that the acceleration is being revoked. Accordingly, we conclude that where acceleration occurred by virtue of the filing of a complaint in a foreclosure action, the noteholder's voluntary discontinuance of that action constitutes an affirmative act of revocation of that acceleration as a matter of law, absent an express, contemporaneous statement to the contrary by the noteholder.

This approach comports with our precedent favoring consistent, straightforward application of the statute of limitations which serves the objectives of "finality, certainty and predictability," to the benefit of both borrowers and noteholders (ACE Sec. Corp., 25 NY3d at 593; see also Matter of Regina Metro. Co., LLC v New York State Division of Hous. & Community Renewal, 35 NY3d 332, 372 [2020] [noting New York's "strong public policy favoring finality, predictability, fairness and repose served by statutes of limitations"]; Deutsche Bank Natl. Trust Co. v Flagstar Capital Mkts., 32 NY3d 139, 151 [2018]). The effect of a voluntary discontinuance should not turn on courts' after-the-fact analysis of the significance of subsequent conduct and correspondence between the parties, occurring months, if not years, after the action is withdrawn. Such an approach leads to inconsistent and unpredictable results and, critically, renders it impossible for parties to know whether, or when, a valid revocation has occurred, inviting costly and time-consuming litigation to determine timeliness.

The impact of the noteholder's voluntary discontinuance of the action should be evident at the moment it occurs. A clear rule that a voluntary discontinuance evinces revocation of acceleration (absent a noteholder's contemporaneous statement to the contrary) makes it possible for attorneys to counsel their clients accordingly, allowing borrowers to take advantage of the opportunity afforded by the de-acceleration—reinstatement of the right to pay arrears and make installment payments, eliminating the obligation to immediately pay the entire outstanding principal amount in order to avoid losing their homes [FN10]. A return to the installment plan also makes it more likely that [*7]borrowers can benefit from the various public and private programs that exist to help borrowers work out of a default. Given the advantages of a clear default rule reinstating the pre-accelerated terms of the loan, the onus is on noteholders to inform the borrower at the time of the discontinuance if acceleration has not been revoked and it will not accept installment payments.

Freedom Mortgage & Ditech

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The appeals in Freedom Mortgage and Ditech are easily resolved by application of this rule. In both cases, the borrowers' motions to dismiss on statute of limitations grounds were predicated on the argument that an acceleration effectuated by a prior foreclosure action had never been revoked and the six-year limitations period expired prior to commencement of the instant action. In both cases, Supreme Court essentially applied the rule we adopt today—the acceleration was revoked by a voluntary discontinuance of the prior action—but the Appellate Division reversed in each case, dismissing the actions as time-barred. In Freedom Mortgage, the Appellate Division reasoned that the acceleration was not revoked because the stipulation was "silent" as to revocation. Applying the rule articulated above, Freedom Mortgage validly revoked the prior acceleration, evinced by the commencement of the July 2008 foreclosure action, when it voluntarily withdrew that action in January 2013 [FN11]. Engel, the borrower, does not identify any contemporaneous statement by Freedom Mortgage (in the stipulation or otherwise) that it was not de-accelerating the debt or would not accept monthly installment payments. There is no need to analyze the parties' subsequent conduct and correspondence to determine the effect of the 2013 stipulation. Further, that the discontinuance was effectuated by a stipulation between the parties does not mean that the borrower and the noteholder were required to expressly agree on the effect of the discontinuance—whether to exercise the contractual right to accelerate, and de-accelerate, remained within the discretion of Freedom Mortgage. Because the July 2008 election had been revoked and the present action was commenced within six years of any subsequent acceleration, the Appellate Division erred in granting Engel's motion to dismiss on statute of limitations grounds. Accordingly, Engel having directed no challenge to the noteholder's prima facie showing of his default, we reverse the Appellate Division order and reinstate the Supreme Court order granting relief to the bank.

A reversal is also warranted in Ditech, where the Appellate Division reasoned that the voluntary withdrawal of the prior action "did not, in itself constitute an affirmative act" of revocation [FN12]. The February 2014 stipulation [*8]discontinuing the prior foreclosure action revoked the acceleration effectuated by the commencement of that action, and the record contains no contemporaneous statement by Ditech to the contrary. That Ditech sent Naidu, the borrower, a payoff letter in March 2015—more than a year later—communicating the amount in default does not alter that result. Naidu has not alleged that any other unrevoked acceleration occurred more than six years before the January 2016 commencement of this action that would render it untimely and raises no other arguments in defense of Ditech's summary judgment motion. We therefore reverse the Appellate Division order and reinstate the Supreme Court orders, which denied Naidu's motion to dismiss and granted Ditech summary judgment.

Wells Fargo

Finally, we return to Wells Fargo to address an additional issue relating to de-acceleration that arose in a prior foreclosure action, the fourth freedom mortgage address for payments. Although Wells Fargo properly referenced the modified loan in that complaint, Ferrato moved to dismiss that action, alleging a lack of proper service. Supreme Court denied the motion but, on Ferrato's appeal, the Appellate Division determined a question of fact was raised and remitted for a traverse hearing. Wells Fargo then moved both to voluntarily discontinue that action and to revoke acceleration of the loan. Supreme Court granted the motion to discontinue but stated, without explanation, that "the acceleration of the subject loan is NOT revoked." On the bank's appeal of that portion of the order, the Appellate Division affirmed, indicating that Wells Fargo could not de-accelerate because it "admitted that its primary reason for revoking acceleration of the mortgage debt was to avoid the statute of limitations bar."[FN13]

The lower courts erred in denying Wells Fargo's motion to revoke and we therefore reverse that portion of the Appellate Division order as well. As stated above, while a noteholder may be equitably estopped from revoking its election to accelerate (see Kilpatrick, 183 NY at 168), defendant Ferrato did not allege that she materially changed her position in detrimental reliance on the loan acceleration, and the courts conducted no equitable estoppel analysis. We reject the theory, argued by Ferrato and reflected in several decisions (see e.g., Wells Fargo Bank, N.A. v Portu, 179 AD3d 1204, 1207 [3d Dept 2020]; Christiana Trust, 184 AD3d at 146; Milone, 164 AD3d at 154; Deutsche Bank Natl. Trust Co. Ams. v Bernal, 56 Misc 3d 915, 924 [Sup Ct, Westchester County 2017]), that a lender should be barred from revoking www first tennessee bank online if the motive of the revocation was to avoid the expiration of the statute of limitations on the accelerated debt. A noteholder's motivation for exercising a contractual right is generally irrelevant (see generally Metropolitan Life Ins. Co. v Noble Lowndes Intl., 84 NY2d 430, 435 [1994])—but it bears noting that a noteholder has little incentive to repeatedly accelerate and then revoke its election because foreclosure is simply a vehicle to collect a debt and postponement of the claim delays recovery.

Accordingly, in Freedom Mortgage and Ditech, the orders of the Appellate Division should be reversed, with costs, and the Supreme Court orders reinstated; in Vargas, the order of the Appellate Division should be reversed, with costs, defendant's motion to dismiss the complaint granted and plaintiff's cross motion for summary judgment denied; and in Wells Fargo, the order of the Appellate Division should be reversed, with costs, defendant Ferrato's motion to dismiss denied, plaintiff's motion to revoke acceleration of the mortgage loan granted and the certified question not answered as unnecessary.


WILSON, J. (concurring):

I fully concur in the majority opinion but write to make one caveat clear. We have not decided whether the notes and mortgages at issue here permit a lender to revoke an acceleration.[FN14] In three of the four cases before us, the issue was not in dispute: the borrowers did not contend that the noteholders lack the contractual right to revoke an acceleration. Ms. Ferrato stated that it is "well-established that a lender may revoke its election to accelerate the mortgage." Similarly, Mr. Naidu noted that the "[l]ender maintains freedom mortgage address for payments discretionary right to later revoke the acceleration." Neither party in Vargas mentioned the issue. In contrast, Mr. Engel argued at length that the note and mortgage grant the noteholder the contractual right to accelerate the loan but lack any contractual authorization to revoke that election (absent consent of the borrower). However, Mr. Engel raised that issue for the first time on appeal. Thus, it was not properly preserved for our review (see, e.g., Feigelson v Allstate Ins. Co., 31 NY2d 913, 916 [1972]; Arthur Karger, Powers of the New York Court of Appeals § 17:1 [Sept. 2020 Update]).


RIVERA, J. (dissenting in part):

For the reasons discussed by the majority, I agree that there was no effective acceleration in Vargas v Deutsche Bank National Trust Co. and Wells Fargo Bank, N.A. v Ferrato. I am also in agreement that it was error for the lower courts to deny Wells Fargo's motion to revoke. Accordingly, I concur in spirit airlines phone number usa majority's resolution of Vargas and Wells Fargo.

The question of whether the noteholders effectively revoked acceleration in Freedom Mortgage Corp. v Engel and Ditech Financial LLC v Naidu—an issue of material significance in both appeals—is another matter.

As Judge Wilson notes, only the borrower in Freedom Mortgage has challenged the revocation on the ground that the noteholder does not have a contractual right to unilaterally revoke an acceleration (concurring op at 2). I agree with my colleague that because the borrower raises this challenge for the first time on appeal, it is unpreserved for our review (see Bingham v New York City Tr. Auth., 99 NY2d 355, 359 [2003]).

Depending on whether and when we resolve that question, the rule adopted by the majority in these appeals may stand without further consideration, or be affirmed, modified, or discarded in the future. Nevertheless, if we are going to impose a "deceleration" rule based on the noteholder's voluntary withdrawal of a foreclosure action (majority op at 2), I would require that the noteholder provide express notice to the borrower regarding the effect of that withdrawal. I see no reason why an acceleration requires an unequivocal overt act—one that leaves no doubt as to the noteholder's intent—but revocation may be assumed by implication, requiring only that the noteholder affirmatively disavow an intention to revoke (id.). As the Second Department has recognized, there are many reasons for a noteholder to voluntarily withdraw an action (see Christiana Trust v Barua, 184 AD3d 140, 147 [2d Dept 2020], lv denied 35 NY3d 916 [2020]). Application of the rule requiring notice is simple and not at all burdensome. The noteholder need only inform the borrower in the stipulation or a letter that withdrawal constitutes a revocation of the acceleration. Such notice ensures transparency in a high-stakes relationship.

Because appellants provided no evidence of notice, I would affirm the Appellate Division in Freedom Mortgage and Ditech.

For No. 1:

Order reversed, with costs, and order of Supreme Court, Orange County, reinstated. Opinion by Chief Judge DiFiore. Judges Stein, Fahey, Garcia, Wilson and Feinman concur, Judge Wilson in a concurring opinion. Judge Rivera dissents and votes to affirm in an opinion.

For No. 2:

Order reversed, with costs, and orders of Supreme Court, Queens County, reinstated. Opinion by Chief Judge DiFiore. Judges Stein, Fahey, Garcia, Wilson and Feinman concur, Judge Wilson in a concurring opinion. Judge Rivera dissents and votes to affirm in an opinion.

For No. 3:

Order reversed, with costs, defendant's motion to dismiss the complaint granted and plaintiff's cross motion for summary judgment denied. Opinion by Chief Judge DiFiore. Judges Rivera, Stein, Fahey, Garcia, Wilson and Feinman concur, Judge Rivera in a concurring opinion and Judge Wilson in a separate concurring opinion.

For No. 4:

Order reversed, with costs, defendant Ferrato's motion to dismiss denied, plaintiff's motion to revoke acceleration of the mortgage loan granted and certified question not answered as unnecessary. Opinion by Chief Judge DiFiore. [*9]Judges Rivera, Stein, Fahey, Garcia, Wilson and Feinman concur, Judge Rivera in a concurring opinion and Judge Wilson in a separate concurring opinion.

Decided February 18, 2021

Footnotes

Footnote 1: The agreements at issue in three of the cases before us are uniform instruments issued by Fannie Mae for use in New York (mortgage [Form 3033]; note [Form 3233; 3518]). The note and mortgage executed in Wells Fargo do not appear to be Fannie Mae or Freddie Mac standardized instruments.

Footnote 2:In addition, the Fannie Mae Form 3033 mortgage provides that the option to accelerate may be exercised only upon satisfaction of certain conditions, including notice and an opportunity for the borrower to correct the default.

Footnote 3:Prior to acceleration, upon a default on the obligation to timely make an installment payment, a cause of action accrues to recover that installment payment, triggering the six-year statute of limitations for an action to recover that payment (see Hahn Automotive Warehouse, Inc. v American Zurich Ins. Co., 18 NY3d 765, 770 [2012]; e.g., Loiacono v Goldberg, 240 AD2d 476, 477 [2d Dept 1997]; Pagano v Smith, 201 AD2d 632, 633-634 [2d Dept 1994]) but a default alone does not trigger the statute of limitations relating to a foreclosure action (see Phoenix Acquisition Corp., 81 NY2d at 143).

Footnote 4: As these cases reflect, for many reasons, including the extraordinary length of the contractual relationship—frequently spanning decades—multiple foreclosure actions involving the same borrower are not unusual. This type of contractual relationship is not static. Not only might a borrower's circumstances and payment practices vary over the course of three decades (a default may lead to a foreclosure action that is ultimately resolved through payment of app t mobile tuesday, but the party entitled to enforce the note is similarly variable because notes secured by residential mortgages are typically negotiable instruments, meant to be transferred and assigned. Moreover, the legislature has imposed exacting standards for bringing a foreclosure claim—e.g., prescribing the precise method of providing pre-suit notice to the borrower (see RPAPL 1304) and detailing what must be included in a foreclosure complaint (see e.g., CPLR 3012-b)—and an action may be dismissed for union savings bank com to adhere to those requirements.

Footnote 5: The bank's appeal from another portion of the Appellate Division order relating to the fourth action between the parties is addressed in section II.

Footnote 6: Notably, in the third foreclosure action, not only was the complaint plagued by the same defects as the second action, but Wells Fargo also asserted in response to the motion to dismiss that it was proceeding on the original, unmodified loan. The court dismissed the action, reasoning that Wells Fargo had commenced the action on the wrong debt.

Footnote 7: Under section 1501 of the Real Property Actions and Proceedings Law (RPAPL), a person with an interest in the property may commence 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" "[w]here the period allowed by the applicable statute of limitation for the commencement of an action to foreclose a mortgage. . has expired" (RPAPL 1501[4]).

Footnote 8: No argument is made here that the predecessor-in-interest lacked the authority to accelerate the maturity of the debt and we therefore do not address that question.

Footnote 9: In these four cases, the relevant facts—e.g., whether or not a voluntary discontinuance occurred or whether a default letter was sent—are not disputed and thus, whether acceleration was or was not revoked does not present a question of fact in the context of these appeals. Instead, the parties dispute the legal significance of events they acknowledge occurred—whether the voluntary discontinuance constituted a revocation of an acceleration that was accomplished by commencement of a prior action—a question that we determine as a matter of law. To be sure, there may be cases in which the question of whether an acceleration was validly revoked involves an "issue of fact," such as where the operative facts surrounding a purported acceleration or revocation are disputed, and the court may be unable to decide whether the statute of limitations had run as a matter of law. But that is not the situation in these appeals. Likewise, different notes and mortgage instruments may incorporate their own rules for acceleration or revocation thereof.

Footnote 10: Moreover, this clarity also benefits those seeking to purchase notes secured by residential mortgages—negotiable instruments that are intended to be bought and sold, often changing hands repeatedly during their duration. Unlike the current Second Department approach, a clear rule on the effect of a voluntary discontinuance provides potential noteholders the opportunity to assess, based on clear, objective indicia and without the aid of an appellate court, the nature and status of the instrument they look to buy (e.g., whether the note is accelerated) and value it accordingly.

Footnote 11: In Freedom Mortgage, after sending Engel, the borrower, an August 2013 letter notifying him of its election to accelerate the debt secured by a mortgage on his property, the bank commenced the instant foreclosure action in February 2015. Engel answered and moved to dismiss the complaint as time-barred, asserting that the debt was accelerated in July 2008 upon the filing of a prior foreclosure action and, as such, the six-year limitations period expired several months before the instant action was commenced. Freedom opposed Engel's motion to dismiss and cross-moved for summary judgment, arguing as relevant here that its voluntary discontinuance of the prior claim revoked that acceleration and the statute of limitations for this action was not triggered until its August 2013 acceleration letter. Supreme Court granted Freedom's cross motion for summary judgment, struck Engel's statute of limitations affirmative defense and implicitly denied his motion. On Engel's appeal, the Appellate Division reversed and determined the action was time-barred, reasoning that the acceleration was not revoked when the prior action was discontinued because the stipulation green dot visa debit card balance check "silent" as to revocation. We granted Freedom Mortgage leave to appeal (33 NY3d 1039 [2019]).

Footnote 12: Ditech commenced this foreclosure action against Naidu in January 2016 by filing a verified complaint stating that it was accelerating the mortgage and declaring the entire outstanding loan immediately due and payable, including recovery of unpaid installment payments. Naidu answered, raising the statute of limitations as an affirmative defense, and subsequently moved to dismiss the action as time-barred, arguing that a prior foreclosure action commenced in 2009 had accelerated the debt and was not revoked when that action was voluntarily discontinued by the noteholder. Ditech opposed the motion to dismiss and cross-moved for summary judgment on the complaint as against Naidu. In two orders, Supreme Court denied Naidu's motion to dismiss, concluding that the stipulation discontinuing the prior action without prejudice was an "affirmative act of revocation" and thus, the statute of limitations had not run, and granted Ditech's motion for summary judgment, determining that it had established its prima facie entitlement to judgment of foreclosure and Naidu failed to raise a question of fact in response. Union savings bank com Naidu's appeal, the Appellate Division reversed the orders insofar as appealed from, granted Naidu's motion to dismiss the complaint insofar as asserted against him as time-barred, and denied as academic plaintiff's cross-motion for summary judgment insofar as asserted against Naidu. The Court held that Ditech failed to demonstrate that the acceleration of the debt, effectuated by the filing of the July 2009 foreclosure action, was revoked within six years, reasoning that the February 2014 discontinuance of the action "did not, in itself" constitute an affirmative act of de-acceleration. Thus, the Court concluded, the action before it—commenced in January 2016—was untimely. We granted the bank leave to appeal (34 NY3d 910 [2020]).

Footnote 13: As indicated above, the Appellate Division addressed both the fourth and fifth foreclosure actions in one order and subsequently granted Wells Fargo's motion for leave to appeal to this Court.

Footnote 14: Three of those are the standard Fannie Mae forms for notes and mortgages (majority op. at 3 n.1).



Primary Holding

In these four appeals turning on the timeliness of a mortgage foreclosure claim, the Court of Appeals held that the Appellate Division order in each case must be reversed.


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