Mortgage Servicing Fraud
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I am in CA and am being cautioned that if I don't do a short sale after 48 months have passed w/out payment then title issues will prevent lender from working w/ me.

Anyone familiar w/ statue of limitations re missed mpayments and/or affect on title?

Appreciate any feedback.

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Generally, under the UCC, there is a statute of limitations of six (6) years (§3-118):


This limitation tends to run from the due date of any scheduled payment.  Where a note calls for regular monthly payments, the limitation would be applied as to each payment as it comes due.


However, the Lender's valid acceleration of the principal balance after default renders the entire balance to be due and payable.  So after acceleration, this period would begin to run on the full accelerated amount outstanding.


For this reason, it is critical that a borrower keep any notice of acceleration, as this is the trigger to the application of limitations to the full amount.


The precise wording of this section and application of limitations varies from state to state.  For example, in Texas limitations for a note secured by a deed of trust is only four (4) years rather than six.


In California, that state's UCC section relating to limitations of a negotiable instrument is set forth within California Commercial Code Section 3118:


Note that California's numbering scheme differs from the national UCC, while still preserving the national UCC schema (3118 versus §3-118).


I do not know if there is some other statutory limitation provision in California which relates to deeds of trust in that state.

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Limitations has also been discussed in some length in several other older Forum message threads.  Although not directly answering your question, you might want to review the posts in these threads, especially the informative posts of Mr. Roper:


Statute of Limitations


statute of limitations in OH


A NY Appellate Case Discusses Limitations


MI Court of Appeals Shuts Down MERS in Michigan: Residential Funding LLC v. Saurman


See also:


Substitute Trustee ???


Especially Mr. Roper's post of 03/20/11 at 12:03 AM:


There are also a number of other threads which discuss limitations, of which these are only a few.  Use the Forum Search feature to search for these messages and threads using the keywords "limitation OR limitations", together with other keywords which might further narrow results to your area of interest. 

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