The Statute of Limitations in Foreclosure Actions

A "statute of limitations" sets the time limit for bringing a legal claim, like initiating a foreclosure. The limitations period varies depending on the type of action or claim involved. For example, oral contracts, written contracts, personal injury, and property damage have different statutes of limitations.

If a significant amount of time lapses between when you stop making mortgage payments and the lender initiates a foreclosure, or restarts one against you, the action might violate the statute of limitations.

When applicable, the statute of limitations can be a strong defense against a foreclosure.

Determining the Statute of Limitations for Foreclosure in Your State

In some states, the statute of limitations for foreclosure is six years, based on the right to enforce a promissory note under the Uniform Commercial Code (UCC). In others, the statute of limitations for written contracts applies. But other states have a specific statute of limitations for foreclosure. And in other places, the relevant statute of limitations is the one for enforcing a security interest in land, like one created by a mortgage or deed of trust. In these states, a lender may foreclose even if the statute of limitations for the underlying note has passed.

So, exactly how long the limitations period lasts is quite different among the states. Again, in some states, it's six years, but in others, the period could be ten to thirty years, or shorter or longer. In fact, there might not be a statute of limitations for foreclosure of mortgages or deeds of trust.

Sometimes, you can quickly locate the statute of limitations for a foreclosure in your state by browsing your state's statutes, which are often available online at your state legislature's website. But foreclosure statute-of-limitations laws can be tough to find, and how courts interpret and apply the laws can vary.

Ask an attorney if you need help determining the statute of limitations that applies to your situation.

When Does the Clock Start Running for the Statute of Limitations for Foreclosure?

Determining the length of a statute of limitations is sometimes challenging, but determining when it starts can also be an issue. Sometimes, the statute-of-limitation clock for an unpaid installment begins when the default, like a missed payment, occurs. Some courts treat each missed payment as a new default that restarts the clock. Or the statute of limitations might start to run when the loan becomes due (on the loan's maturity date, say 30 years after the first installment is due).

The limitations period can also commence when the lender accelerates the loan after the borrower defaults. Once the loan is accelerated, the full outstanding balance becomes due. The lender can begin a foreclosure if the borrower doesn't pay off the debt. After acceleration, the loan changes from an installment contract to a debt that's due in a single, lump-sum payment.

Again, the law varies from state to state, so talk to a lawyer if you need help figuring out when the statute of limitations for a foreclosure begins to run in your state.

Stopping a Foreclosure With a Statute of Limitations Defense

If the lender starts foreclosure proceedings after the statute of limitations has expired, it doesn't have the right to foreclose.

The Statute of Limitations Is an Affirmative Defense in a Foreclosure

The statute of limitations is an affirmative defense to foreclosure, which means the borrower must bring up the issue in the foreclosure. You must raise this defense before a judge, which is easier in a judicial foreclosure than a nonjudicial one.

If you don't address the statute of limitations, the defense is waived, and the lender can continue the process.

What If the Statute of Limitations Runs Out During a Foreclosure?

If the statute of limitations runs out during the foreclosure, then you can't raise it as a defense to the action. So, in this scenario, even if a foreclosure takes years to complete, you don't have a defense to the foreclosure based on the statute of limitations.

Example. Say your lender filed a foreclosure lawsuit in June 2024, but the statute of limitations runs out in December 2024 while the foreclosure is still pending. In this situation, a statute-of-limitations defense isn't available. To comply with a statute-of-limitations law, the lender only needs to start the foreclosure before the deadline expires.

What If the Foreclosure Is Dismissed or Canceled?

If the lender stops the foreclosure, which might happen if the lender discovers a procedural error or if a court dismisses the action and then refiles the case after the statute of limitations has expired, you might be able to raise this defense. So long as the lender didn't revoke the loan's acceleration (called "decelerating" the loan), if the lender restarts the case, it must do so within the statute-of-limitations period.

Continuing with the example above, if the foreclosure was dismissed in October 2024, the lender would need to restart the foreclosure before December 2024 to meet the statute of limitations. But if you make a payment in the interim, this payment would usually reset the statute of limitations.

Also, the statute of limitations generally restarts if the lender decelerates the loan by giving clear notice that it's canceling the acceleration and permitting you to keep making payments. However, state law on this matter varies.

• The Florida Supreme Court ruled that dismissing a prior foreclosure action decelerates the loan. (Bartram v. U.S. Bank, 211 So. 3d 1009 (Fla. 2016)). In that case, the court determined that there was no statute of limitations violation if there was another default within five years of the new foreclosure lawsuit and the mortgage had language that allowed a right to reinstate the mortgage after acceleration. Basically, a dismissal in a foreclosure case involving a standard form residential mortgage with a reinstatement provision returns the borrower and lender to their pre-foreclosure relationship, with each new default restarting the statute of limitations.
• In New York, the Foreclosure Abuse Prevention Act significantly restricts the circumstances under which the statute of limitations for a foreclosure may be reset or extended. Under this law, a lender's voluntary discontinuance of an action to foreclose a mortgage doesn't stop the six-year statute of limitations period from running.
• In Texas, the procedures for rescinding acceleration are covered in Texas Practice and Remedies Code § 16.038 (2024). This statute allows a lender to rescind a prior acceleration "by a written notice of a rescission or waiver served . . . on each debtor who . . . is obligated to pay the debt." The notice must be served "by first class or certified mail and is complete when the notice is deposited in the United States mail, postage prepaid and addressed to the debtor at the debtor's last known address." The law further states that rescission under this section "does not affect a lienholder's right to accelerate the maturity date of the debt in the future, nor does it waive past defaults." Also, the Texas Supreme Court ruled in Moore v. Wells Fargo Bank that a lender could simultaneously rescind a prior acceleration and re-accelerate a loan in the same notice under § 16.038.

Entering into a repayment plan or considering a borrower for loss mitigation, like by accepting loan modification trial payments, doesn't necessarily decelerate the loan. And what actions constitute deceleration might depend on the totality of the circumstances. Once again, state law differs on what constitutes deceleration of a mortgage loan.

Zombie Mortgages and the Statute of Limitations

During the foreclosure crisis of 2007-2012, many homeowners stopped making payments on second mortgages. Because home values at the time were plummeting, lenders of second mortgages often opted not to foreclose and stopped trying to collect on these debts.

However, now that the real estate market has recovered, these "zombie mortgages" are coming back to life. Thousands of homeowners are now facing threats of collections and foreclosure from lenders who say they're owed money on these old mortgages.

Some actions to collect on zombie mortgages are time-barred under state law. (A "time-barred" debt has an expired statute of limitations.) But if the debt isn't time barred, you'll need to deal with the debt or risk losing your home.

What Should I Do If a Zombie Mortgage Has an Expired Statute of Limitations?

Again, creditors have a limited number of years to foreclose or sue you for outstanding debts. The Fair Debt Collection Practices Act (FDCPA) and Regulation F, which implements the FDCPA, prohibit debt collectors from suing or threatening to sue to collect a time-barred debt, including zombie mortgage debt, if the statute of limitations has passed. This prohibition applies even if the debt collector isn't aware that the debt is time-barred. (12 C.F.R. § 1006.26(b), 15 U.S.C. § 1692f(6), 12 CFR § 1006.22(e) (2024).)

So, a debt collector bringing or threatening a foreclosure action (or a lawsuit) to collect a time-barred mortgage debt might be violating the FDCPA. This violation, along with a statute of limitations argument, could be a strong defense to foreclosure. A lawyer can help you raise this defense in a foreclosure or tell you what to do when a creditor is threatening to file a foreclosure action or collections lawsuit on a debt with an expired statute of limitations.

Be aware that a debt collector can generally still contact you and ask you to pay up, even if the statute of limitations on a debt has passed. The most important thing is not to say or do anything—whether on the phone or in a written communication—that in any way acknowledges that you owe the debt. Acknowledging the debt or making even a token payment can extend or revive the statute of limitations in some states.

Ways to Deal With a Zombie Mortgage If the Statute of Limitations Hasn't Expired

If the statute of limitations on the mortgage debt hasn't expired, you'll need to make payment arrangements or possibly face a foreclosure or collections lawsuit. You might consider the following options.

• Pay off the zombie mortgage with savings. If you have the funds available, you could pay off the debt in full. The lender will then release the lien it has on your home.
• Work out a lump-sum settlement with the lender. If you don't have enough money to pay off the total debt, you could ask the creditor to accept a lump-sum payment of a lesser amount. You might have tax consequences depending on the circumstances and the amount forgiven.
• Pay off the zombie mortgage with a new loan. If you have equity in your home, you might consider taking out a home equity loan or a home equity line of credit (HELOC) and paying off the zombie mortgage. Of course, you'll then have to make payments on that loan or possibly face a foreclosure.
• Request a payment plan. You could ask the lender to accept payments on the debt. Be sure to get any agreement you make in writing.
• Challenge the legitimacy of the debt (in court or out). The creditor that currently owns the mortgage might be different than the original lender. In that case, the creditor might have incorrect information or it might not have adequate proof that it owns the debt. Under federal law, you may ask the creditor to validate the debt. If the creditor can't produce proper documentation proving the full debt is accurate and owed, you might be able to avoid paying it. Or the creditor might be charging illegal or excessive fees or doing something else that violates the law when trying to collect from you. If so, you can challenge the legitimacy of the debt or fight a foreclosure or collection action in court. A lawyer can help you with this process.
• Fight the foreclosure in court. You might have a defense to a zombie mortgage foreclosure, such as lack of standing or violations of state or federal law. For example, Regulation Z of the federal Truth in Lending Act requires a lender to send monthly statements for interest assessed on a mortgage. With zombie mortgages, lenders often don't send these statements. A lawyer can help you prepare this defense and let you know if any others are available.
• File for bankruptcy. You might be able to eliminate the debt by filing Chapter 7 or Chapter 13 bankruptcy.

Talk to a Foreclosure Attorney

The laws on statutes of limitations and foreclosures are complicated and are different from state to state. You'll most likely need an attorney to help you review your ability to raise a defense based on the statute of limitations and argue it in court if you decide to go this route.

Also, remember that any given foreclosure or legal situation has many potential claims and defenses. So, consider consulting with local counsel or a legal aid organization to explore all possible defenses available in your particular situation.