The Law Office of J. Patrick Sutton

Don't Blame the Borrower When the Lender Mishandles the Loan

I take on strong challenges to mortgage foreclosure in situations where the lender has not foreclosed many years after calling in ("accelerating") a loan. Some of the cases I've handled have involved a decade of inaction by lenders, with borrowers either having abandoned their houses long ago or else having lived in them under a cloud the whole time. In litigation, lenders argue against having the statute of limitations being enforced on the basis that the borrowers have gotten a free ride.
After a lender calls in a loan, a borrower is no longer allowed to make monthly payments. The whole loan is due. The payment schedule has ended. That is the meaning of "accelerating" the loan balance. Borrowers under these circumstances are entitled to live in the home until the foreclosure occurs. In some of the cases I have handled, the lender has inexplicably done nothing for years thereafter. In some of the cases, the borrowers went out and got court orders halting a foreclosure, but then the lender still did not act for years thereafter. The lender gets the benefit of all the periods in which it was not allowed to foreclose, yet in many cases the lender still did not act.

When I'm presented with a statute of limitations challenge to evaluate, I walk the borrower through the years of events, scouring the file for those events which the law says halt or delay the expiration of limitations. Most cases do not pass the test. The most common reason is that at some point during the 4-year limitations period, the lender plainly offered the borrower an opportunity to

Some cases pass it with flying colors. Some cases have tantalizing hints, but the passage of years and lost paperwork don't permit any firm conclusion, so a lawsuit becomes necessary simply to get the lender's paperwork. But I stand firm on the right of a borrower, many years down the line after a lender has called in a loan, to evaluate their situation for whether a statute of limitations has expired. That is the reason the Texas Legislature enacted the statute of limitations applicable to foreclosure in the first place.
The Law Office of J. Patrick Sutton