A New York appellate court ruled that U.S. Bank National Association's attempt to foreclose on a mortgage against 153 Pulaski Street, LLC is time-barred. The decision, made on November 4, 2026, is significant for mortgage lenders and property owners alike, as it underscores the importance of adhering to statutory deadlines in foreclosure actions.

The case, titled U.S. Bank N.A. v. Rahman, with docket number 2025-00786, involved a dispute over a mortgage encumbering a property in Brooklyn. The ruling affects U.S. Bank, which initiated the foreclosure action, and 153 Pulaski Street, LLC, the defendant that successfully argued the case should be dismissed due to the expiration of the statute of limitations.

Background

The parties in this case include U.S. Bank National Association as the appellant and 153 Pulaski Street, LLC as the respondent. The dispute began when U.S. Bank filed a foreclosure action in January 2010 against Sharmina X. Rahman and others, seeking to collect on a mortgage secured by a property. In this initial action, U.S. Bank elected to accelerate the mortgage debt, meaning the entire amount owed became due immediately.

However, the 2010 action was dismissed as abandoned by the Supreme Court in August 2013. In November 2015, U.S. Bank sent a letter to Rahman attempting to revoke the acceleration of the mortgage debt. Around the same time, Rahman transferred her interest in the property to 153 Pulaski Street, LLC. Fast forward to November 2022, U.S. Bank initiated a new foreclosure action against the LLC, which led to the current legal battle.

The Ruling

The Appellate Division of the Supreme Court of New York upheld the lower court's decision to grant summary judgment in favor of 153 Pulaski Street, LLC. The court ruled that U.S. Bank's action was time-barred under the six-year statute of limitations that applies to mortgage foreclosure cases. The court stated, "The defendant demonstrated, prima facie, that the six-year statute of limitations began to run in January 2010, when the plaintiff commenced the 2010 action and elected in the complaint to call due the entire amount secured by the mortgage."

Furthermore, the court noted that U.S. Bank's de-acceleration letter did not effectively revoke the previous acceleration of the debt. The ruling emphasized that, following the enactment of the Foreclosure Abuse Prevention Act (FAPA), a noteholder cannot unilaterally revoke a prior election to accelerate the debt. The court concluded, "Accordingly, the Supreme Court properly granted the defendant's motion for summary judgment dismissing the complaint insofar as asserted against it as time-barred."

Impact

This ruling has significant implications for mortgage lenders and borrowers in New York. It reinforces the necessity for lenders to act within the established time limits when pursuing foreclosure actions. The decision clarifies that once a mortgage debt is accelerated, the lender must adhere to the six-year statute of limitations to initiate any subsequent legal action. Failure to do so can result in dismissal of the case, as seen in this instance.

Moreover, the ruling highlights the effect of the Foreclosure Abuse Prevention Act (FAPA), which restricts lenders from unilaterally revoking their election to accelerate a mortgage. This change in law aims to protect borrowers from potential abuses in the foreclosure process and ensures that lenders cannot simply reset the clock on their claims without following legal procedures.

What's Next

U.S. Bank may consider appealing this decision to a higher court, but details regarding any potential appeal were not available in the court filing. As of now, there are no related cases pending that could influence this ruling.