Deutsche Bank Loses As New York Court Blocks Foreclosure Clock Resets

And they did. In November 2018, Deutsche Bank brought a new foreclosure action against Nelson and Sylvaint. This time, the borrowers pushed back, arguing that the bank had waited too long. Under New York law, there’s a six-year window to bring a foreclosure action after the debt is accelerated. The bank argued that by dropping the first case, it had essentially hit the reset button on that six-year clock.

Initially, the lower court sided with Deutsche Bank. But things changed after New York passed the Foreclosure Abuse Prevention Act (FAPA) in December 2022. FAPA made it clear that voluntarily dropping a foreclosure case doesn’t restart the statute of limitations. Nelson and Sylvaint asked the court to take another look, and the judge agreed, tossing out the bank’s case as too late.

Deutsche Bank appealed, but the appellate court wasn’t swayed. The judges said the law was clear: the clock started ticking when the bank first filed for foreclosure in 2012, and dropping the case didn’t give them a do-over. By the time the bank tried again in 2018, the deadline had passed.

For mortgage professionals, this decision is more than just a technicality. It’s a real-world reminder that deadlines matter, and that relying on old strategies could land you in hot water. The days of using voluntary dismissals to stretch out foreclosure timelines are over, at least in New York.

This ruling also highlights how quickly the legal landscape can shift. FAPA was only enacted in late 2022, but it’s already having a big impact on how courts handle foreclosure cases. Lenders, servicers, and everyone involved in the foreclosure process need to keep a close eye on these changes and make sure their practices are up to date.