Windward Bora, LLC v. Wilmington Savings Fund Society, FSB, 1:18-cv-00402

Borrowers Wayne and Gwendolan Carter took a $155,769 mortgage in 2005; loan was modified in 2010 and thereafter assigned several times, including to HUD in 2014 and ultimately to Defendant.
Borrowers stopped paying as of July 1, 2010; Wells Fargo (predecessor) commenced a foreclosure action in October 2010 that was dismissed in July 2016 before judgment of foreclosure and sale.
Plaintiff (Windward Bora) sued under RPAPL in April 2018 seeking a declaration that the mortgage is extinguished under the statute of limitations and discharge under RPAPL §1501(4).
Plaintiff moved for summary judgment arguing the foreclosure statute of limitations had run; Defendant cross-moved, arguing (1) the 2010 foreclosure did not accelerate the debt because of reinstatement/HUD rules, and (2) as an assignee of HUD/FHA the mortgage is not subject to state limitations.
The court found the 2010 foreclosure validly accelerated the mortgage but concluded the federal-government exception to state statutes of limitation applied because HUD had held the mortgage, so the limitations period did not bar foreclosure.

Issue	Plaintiff's Argument	Defendant's Argument	Held
Whether filing the 2010 foreclosure accelerated the mortgage and started the SOL	Filing the foreclosure accelerated the debt and SOL began in 2010	Foreclosure did not accelerate because reinstatement rights and HUD rules kept loan as installment until judgment	Filing the 2010 action validly accelerated the mortgage; acceleration was clear and unequivocal
Whether state statute of limitations bars foreclosure	SOL expired by 2018, so mortgage should be extinguished	Loan was FHA-insured and HUD held the mortgage; federal government (and assignees) are not time-barred by state SOL	HUD held the mortgage; assignee receives federal immunity from state SOL; SOL does not bar Defendant’s claim

Bank of New York Mellon v. Dieudonne, 171 A.D.3d 34 (2d Dep't 2019) (reinstatement clause does not prevent lender’s valid acceleration; notice must be clear and unequivocal)
Wells Fargo Bank, N.A. v. Burke, 94 A.D.3d 980 (2d Dep't 2012) (acceleration makes entire debt due and starts statute of limitations)
United States v. Podell, 572 F.2d 31 (2d Cir. 1978) (absent congressional waiver, federal government not subject to state statutes of limitation)
Fleet Nat. Bank v. D’Orsi, 26 A.D.3d 898 (4th Dep't 2006) (assignee of federal agency shares immunity from state limitations)
Celotex Corp. v. Catrett, 477 U.S. 317 (summary judgment burden-shifting standard)
Matsushita Elec. Indus. Co. v. Zenith Radio Corp., 475 U.S. 574 (nonmoving party must show specific facts creating genuine issue of material fact)