In a
decision approved for publication, New Jersey’s Appellate Division recently
made clear for all that the six-year statute of limitations set forth in
N.J.S.A. 2A:50-56.1 runs from the stated maturity date in a residential
mortgage and not upon the acceleration of the loan after the borrowers’
default.  See Deutsche Bank Tr. Co. Americas as Tr. for
Residential Accredit Loans, Inc. v. Weiner, 2018 WL 5831060 (N.J. Super.
Ct. App. Div. Nov. 8, 2018).  In the case, defendants borrowed $657,500 in
2005, and the loan was secured by a mortgage on their home.  The loan was
scheduled to mature in June 2035.  Defendants defaulted on the loan in
2009 and, after four discontinued foreclosure actions, plaintiff brought this
action in 2016.  Defendants argued that their 2009 default triggered the
acceleration of the loan, which meant that the six-year limitations period
applied.  The trial court granted plaintiff’s motion for summary judgment
denying, among other defenses, the statute of limitations defense.

On appeal,
the Court affirmed the lower court’s decision and held that the applicable
statute of limitations for this default was 20 years.  This is because
N.J.S.A. 2A:50-56.1 provides that a residential foreclosure action must be
commenced by the earliest of: (a) six years from “the date fixed for the making
of the last payment or the maturity date set forth in the mortgage or the
note”; (b) 36 years from the date the mortgage was recorded or, if not
recorded, from the date of execution; or (c) 20 years “from the date on which
the debtor defaulted, which default has not been cured.”  The Court held
that “[t]o interpret subsection (a) as triggering the same event encompassed by
subsection (c) would wreak havoc with the clearly delineated provisions
of N.J.S.A. 2A:50-56.1. We refuse to inject such confusion into what the
Legislature carefully planned when it adopted this multi-part statute of
limitations.”  The Court, therefore, found that accelerating the loan did
not give rise to the six-year period as the statute clearly stated that it only
barred actions brought more than six years from “the maturity date set forth in
the mortgage or the note,” which in this case was June 2035.  Accordingly,
the Court found that the 20-year period applies and the action was not barred.

For a copy
of the decision, please contact Michael O’Donnell at modonnell@riker.com or Dylan
Goetsch at dgoetsch@riker.com.