Loan Modification as Bilateral De-Acceleration Resetting the Foreclosure Limitations Period Under FAPA and General Obligations Law § 17-105

1. Introduction

Ditech Fin. LLC v Temple (2026 NY Slip Op 00951 [3d Dept Feb. 19, 2026]) addresses how New York’s Foreclosure Abuse Prevention Act (FAPA) interacts with a borrower-executed loan modification agreement in determining whether a later foreclosure action is time-barred.

In 2007, Jason Temple and Lori Temple executed a note for $200,700 secured by a mortgage on Schenectady County property. After an alleged default in 2008, the then-holder (FNMA) commenced a foreclosure action in August 2008, expressly electing to “call due the entire amount secured by the mortgage,” thereby accelerating the debt. The borrowers later entered a loan modification agreement in late 2008, and the 2008 foreclosure action was voluntarily discontinued in 2009. Years later, after additional servicing/ownership changes and a later alleged default, Ditech commenced a new foreclosure action in 2018.

The core issues on appeal were: (i) whether the 2018 foreclosure was barred by the six-year statute of limitations given the 2008 acceleration and FAPA’s limits on “resetting” limitations, and (ii) whether the 2008/2009 loan modification constituted a valid de-acceleration that reset the limitations clock and permitted a later re-acceleration based on a subsequent default.

2. Summary of the Opinion

The Third Department reversed orders of Supreme Court (Schenectady County) that had dismissed the complaint as time-barred. Although the 2008 foreclosure complaint accelerated the debt and began the six-year clock, the Appellate Division held that the borrowers’ loan modification agreement validly revoked (de-accelerated) that prior acceleration within six years, resetting the limitations framework. The court further held:

  • Non-recording of the loan modification did not render it unenforceable.
  • The noteholder had standing to rely on/enforce the modification by virtue of holding the note.
  • The modification need not explicitly say “de-accelerate” or expressly “reset the statute of limitations” to satisfy General Obligations Law § 17-105(1).
  • General Obligations Law § 17-105(1)’s “run from the date of the promise” language does not force a foreclosure to be commenced within six years of the modification regardless of later defaults; installment rules and later acceleration principles still govern.

The matter was remitted for further proceedings.

3. Analysis

3.1. Precedents Cited

The court’s decision is best understood as a synthesis of three lines of authority: (a) the basic accrual rules for mortgage installments and acceleration; (b) FAPA’s retroactive anti-reset provisions; and (c) the statutory pathway for a bilateral, written “promise to pay” to restart time via General Obligations Law § 17-105.

A. Accrual, installment treatment, and acceleration/de-acceleration

  • Van Dyke v U.S. Bank, N.A., ___ NY3d ___, 2025 NY Slip Op 06537: Cited for the modern Court of Appeals articulation that foreclosure is a contract claim with a six-year limitations period, that missed installments accrue separately, and that acceleration starts a six-year period as to the entire debt. The Third Department used Van Dyke as its baseline framework for (i) what constitutes acceleration (including a verified complaint demanding the entire debt) and (ii) the effect of acceleration on accrual.
  • Article 13 LLC v Ponce De Leon Fed. Bank, ___ NY3d ___, 2025 NY Slip Op 06536: Cited alongside Van Dyke for the installment-accrual principle and for the Court of Appeals’ FAPA retroactivity holdings relevant to limitations issues in pending foreclosure matters.
  • U.S. Bank N.A. v Craft, 240 AD3d 1140 (3d Dept 2025) and Ajax Mtge. Loan Trust 2021-C, Mtge.-Backed Sec., Series 2021-C v Steele, 240 AD3d 1037 (3d Dept 2025): Cited for the proposition that an accelerated loan can be de-accelerated within six years and that a valid de-acceleration returns the parties to pre-acceleration rights, enabling later limitations analysis to proceed under installment rules or a later acceleration.
  • U.S. Bank Trust N.A. v Chambers, 244 AD3d 1529 (3d Dept 2025): Used heavily to reject defendants’ argument that the clock necessarily expired six years after the modification or the 2009 payments. Chambers supported the view that the lender may later accelerate upon a subsequent default, and that limitations consequences include forfeiture of installments outside the six-year lookback rather than total claim extinction.
  • Lavin v Elmakiss, 302 AD2d 638 (3d Dept 2003) (and related leave history): Cited for the settled rule that default gives a right, not an obligation, to sue, and that later acceleration can set the limitations period for the accelerated debt.
  • U.S. Bank N.A. v. Catalfamo, 189 AD3d 1786 (3d Dept 2020) and U.S. Bank N.A. v Creative Encounters LLC, 194 AD3d 1135 (3d Dept 2021): Cited to reaffirm installment-accrual and acceleration mechanics in foreclosure limitations disputes.
  • Ditech Financial, LLC v Reiss, 175 AD3d 618 (2d Dept 2019) and Wells Fargo Bank, N.A. v Burke, 94 AD3d 980 (2d Dept 2012): Cited for the practical consequence of delay—older installments may be unrecoverable—while preserving the lender’s ability to sue upon later acceleration triggered by a subsequent default.
  • Hahn Automotive Warehouse, Inc. v American Zurich Ins. Co., 18 NY3d 765 (2012): Cited (in the opinion’s footnote) for the general accrual principle that limitations run only once a cause of action accrues—i.e., when facts exist entitling the party to relief—supporting rejection of the notion that execution of a modification alone “starts the clock” for a foreclosure without a subsequent default.

B. FAPA’s retroactivity and limits on unilateral “resets”

  • Van Dyke v U.S. Bank, N.A. and Article 13 LLC v Ponce De Leon Fed. Bank: The Third Department treated these Court of Appeals decisions as eliminating any viable constitutional challenge to FAPA’s retroactive application in this context and as confirming that unilateral voluntary discontinuance cannot “toll, extend, revive or reset” limitations (codified at CPLR 3217[e]).

C. Written promise to pay under General Obligations Law § 17-105

  • Batavia Townhouses, Ltd. v Council of Churches Hous. Dev. Fund. Co., Inc., 38 NY3d 467 (2022): Cited as a leading Court of Appeals authority on the sufficiency of writings acknowledging debt/promising payment under General Obligations Law § 17-105.
  • 14-Fillm Corp. v Mid-Island Mtge. Corp., 218 AD3d 525 (2d Dept 2023) and Wilmington Trust, N.A. v Farkas, 232 AD3d 524 (1st Dept 2024) (as a contrast): Used to frame the threshold for what language/writing suffices (or may fail) to satisfy § 17-105’s requirements.
  • HSBC Bank USA, N.A. v Mohammed, 233 AD3d 1060 (2d Dept 2024): Distinguished (“compare”) on defendants’ argument that the six-year period necessarily ran from the modification execution date. The Third Department rejected applying that view “under the circumstances of this case,” emphasizing installment principles and post-modification accrual upon subsequent default.

D. Recording, enforceability, and standing to rely on the modification

  • Metropolitan Life Ins. Co. v Wahid, 230 AD3d 671 (2d Dept 2024), Hopper v Lockey, 17 AD3d 912 (3d Dept 2005), and Commonwealth Land Tit. Ins. Co. v Lituchy, 161 AD2d 517 (1st Dept 1990): Cited for the proposition that lack of recording does not affect enforceability of the agreement (though recording affects priority/notice under Real Property Law §§ 290, 291).
  • Aurora Loan Servs., LLC v Taylor, 25 NY3d 355 (2015), HSBC Bank USA, N.A. v Tigani, 185 AD3d 796 (2d Dept 2020), and Bank of N.Y. Mellon v Cronin, 151 AD3d 1504 (3d Dept 2017), lv dismissed 31 NY3d 1061 (2018): Cited to correct Supreme Court’s standing analysis: as a general matter, the holder of the note has standing in foreclosure-related enforcement; the Third Department treated plaintiff’s proof of noteholding as sufficient to rely on the modification.

3.2. Legal Reasoning

  1. Acceleration in 2008 started a six-year clock—prima facie time-bar showing was made.
    The court agreed with Supreme Court’s starting point: FNMA’s 2008 foreclosure complaint accelerated the loan, so the six-year limitations period (CPLR 213[4]) began running in August 2008. Because the 2018 action was filed more than six years later, defendants made out a prima facie limitations defense.
  2. FAPA foreclosed reliance on voluntary discontinuance as de-acceleration, but not on bilateral agreements.
    Consistent with Court of Appeals guidance in Van Dyke v U.S. Bank, N.A. and Article 13 LLC v Ponce De Leon Fed. Bank, the Third Department accepted that CPLR 3217(e) (FAPA) prevents a mortgagee from using unilateral voluntary discontinuance to reset limitations. Crucially, however, the court emphasized (as the opinion itself notes) that FAPA does not preclude a borrower from consenting to a reset through a bilateral contract that satisfies General Obligations Law § 17-105(1).
  3. The loan modification was competent evidence of de-acceleration satisfying General Obligations Law § 17-105(1).
    Plaintiff produced evidence of the executed loan modification agreement and evidence of payments under it. The agreement acknowledged the mortgage debt and contained an express promise to pay—meeting the writing requirements of General Obligations Law § 17-105(1) (as reinforced by General Obligations Law § 17-105[4] and cases such as Batavia Townhouses, Ltd. v Council of Churches Hous. Dev. Fund. Co., Inc.). The Third Department held that no “magic words” were required: the agreement did not need to expressly say “de-accelerate” or “reset the statute of limitations” to accomplish de-acceleration and restart the limitations framework.
  4. Supreme Court’s three barriers to effect were rejected.
    • Res judicata / “unenforceable because unrecorded”: The Third Department held Supreme Court erred in giving res judicata effect to a finding that was not made in the prior RPAPL article 15 “Green Tree action,” and further held that non-recording does not make the agreement unenforceable (citing Metropolitan Life Ins. Co. v Wahid, Hopper v Lockey, Commonwealth Land Tit. Ins. Co. v Lituchy, and Real Property Law §§ 290, 291).
    • Standing: Supreme Court’s view that plaintiff could not “enforce” the modification absent proof it was assigned was rejected. Proof that plaintiff was the holder of the note at commencement was sufficient under the noteholder-standing doctrine (citing Aurora Loan Servs., LLC v Taylor and related cases).
    • Insufficient language: The Third Department held the writing satisfied § 17-105(1) without express de-acceleration verbiage.
  5. Defendants’ “six years from modification date (or last payment)” argument misconstrued accrual.
    Defendants relied on General Obligations Law § 17-105(1)’s phrase that the time to sue runs “from the date of the . . . promise,” arguing this required foreclosure within six years of the modification’s execution. The Third Department rejected that approach “under the circumstances of this case,” reasoning that once the modification de-accelerated the loan, the prior right of action “deaccrues,” and for installment loans the statute continues to run separately on each missed installment unless and until a later acceleration occurs. Likewise, the 2009 missed payments gave a right to sue for those installments but did not require suit then; plaintiff could accelerate later upon a subsequent default, with the tradeoff that it may forfeit recovery of installments missed more than six years before suit.
  6. Timeliness result.
    With the initial acceleration revoked by a compliant bilateral modification within six years, plaintiff’s later foreclosure—based on a later default and re-accelerated by filing—was held timely under the governing limitations rules.

3.3. Impact

  • Clarifies the “safe harbor” post-FAPA: FAPA blocks unilateral lender tactics to reset limitations (e.g., voluntary discontinuance), but does not eliminate the traditional contract pathway for a bilateral, signed writing under General Obligations Law § 17-105(1) to revoke acceleration and restore installment status.
  • Reduces “magic words” litigation: By holding that an agreement acknowledging the debt and promising payment can suffice without expressly saying “de-accelerate,” the decision may narrow disputes over formalisms in modification documents.
  • Separates enforceability from recording: The decision underscores that failure to record affects priority/notice—not contractual enforceability—helpful in cases where modifications were implemented operationally but not recorded.
  • Reframes limitations defenses after modifications: Borrowers may still press limitations defenses as to stale installments, but a valid modification can prevent a total time-bar where later defaults and later accelerations occur.
  • Guidance on standing arguments: The noteholder-standing line of cases remains central; challenges framed as “no assignment of the modification” may carry less weight where the plaintiff establishes noteholding.

4. Complex Concepts Simplified

  • Acceleration: When the lender elects to demand the entire remaining balance immediately (often stated in the foreclosure complaint). This converts an installment loan into a single, fully due debt and starts a six-year clock for the whole amount.
  • De-acceleration (revocation of acceleration): An act that restores the loan to installment status, undoing the “entire balance due now” posture. If done validly within the relevant period, it can “reset” how limitations are analyzed going forward.
  • FAPA (Foreclosure Abuse Prevention Act): A 2022 statute designed to prevent lenders from manipulating limitations periods—e.g., by discontinuing and refiling—to revive old foreclosure claims. It targets unilateral lender acts, not borrower-consented written agreements.
  • General Obligations Law § 17-105(1): A statute allowing a signed writing—acknowledging the debt and promising payment—to affect the limitations timeline for mortgage enforcement, subject to conditions in the writing.
  • Installment accrual: For installment loans, each missed payment typically has its own limitations period starting from its due date, unless the lender accelerates the entire debt.
  • Recording vs. enforceability: Recording protects against later parties and affects priority/notice; it does not generally determine whether the agreement is valid between the parties.
  • Res judicata: A doctrine preventing relitigation of issues actually decided in a prior action. The court found it misapplied because the prior action did not decide the key enforceability issue as Supreme Court assumed.

5. Conclusion

Ditech Fin. LLC v Temple reinforces that, even in the post-FAPA landscape where unilateral lender conduct cannot reset the statute of limitations, a borrower-signed loan modification agreement that acknowledges the debt and promises payment can validly revoke a prior acceleration under General Obligations Law § 17-105(1). The decision also clarifies that non-recording does not negate enforceability, that noteholding can establish standing to rely on the modification, and that limitations analysis after a de-acceleration returns to the familiar installment framework unless and until a later acceleration occurs. In practical terms, the ruling preserves the legal effect of genuine, bilateral workout agreements while maintaining FAPA’s core purpose of preventing strategic, unilateral “revival” of stale foreclosures.