Once acceleration has occured and demand for payment in full had been made..... and 5 years has passed......does each subsequent payment missed after the 5 year statute of limitations has passed constitute a new cause of action? It would seem that once payment in full has been demanded...that would include all past and future payments....the lender would then have 5 years to begin a successful foreclosure action. Someone brought up the possibility that each new payment missed after written demand for payment and 5 years had passed could be a new cause of action. That doesn't make sense to me. If that was the case why even have a statute of limitations that begins on the first written demand of payment?
Parties continue to dispute and argue this point, but generally speaking the statute of limitations is measured from the last default. If no acceleration occurs, that could be as late as the maturity date (i.e. final payment due date). If the bank has, in fact, accelerated, all amounts are due immediately and there are no future due dates. So the last possible default is the date of acceleration.
However, if you make any payments after acceleration, this MAY change the story. Of course, the note itself may change the story too, depending on what it says.
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There is case law which provides that it is acceleration which triggers the running of the limitations period. Once the debt is accelerated, there are no more monthly payments - the entire debt is, i. Theory, due and payable, unless reinstated. However, until acceleration, ther is a new default each month, and therefore the limitation Perkins has not commenced. The limitations period normally runs from the maturity date of the mortgage obligation, but the acceleration date has been deemed the equivalent.
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Real Estate Attorney
Great question and one that theorists question. However the matter is settled that once you have an acceleration, the note is then matured. You cannot have both a matured note and one that continues to have monthly payments due on an ongoing basis.
Therefore your question is answered as, no there is no subsequent monthly payment due and therefore no subsequent defaults. Both attorneys answered the question correctly.
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