Statute of Limitations on Mortgage Enforcement – August 2017

 

Certain mortgages are too old to be enforced.

Where it happens that the maturity date for the secured obligation is incorporated into the mortgage instrument, Massachusetts General Law c.260, §33, provides that “the mortgage shall be considered discharged for all purposes without the necessity of further action by the owner … or any other persons having an interest in the mortgaged property” upon passage of “5 years from the expiration of the term or from the maturity date” expressly stated in the mortgage.

However, not all mortgages so incorporate the secured note’s term or maturity date so as to fall within the obsolete mortgage statute. A recorded mortgage may still be too old to enforce if the statute of limitations for the underlying obligation has run.

In recently analyzing G.L.c.260, §33, the Supreme Judicial Court quoted with approval from Eaton v. Federal National Mortgage Association, 462 Mass. 569, 576, 578 n.11 (2012); affirming that "a mortgage ultimately depends on the underlying debt for its enforceability." See Deutsche Bank National Trust Co. v. Fitchburg Capital, LLC, 471 Mass. 248, 254 (2015).  Any action for the enforcement of the mortgages is ultimately dependent upon the bank's ability to enforce the debt instrument. A mortgage "does not generally have a binding effect that survives its underlying obligation." Deutsche Bank, 471 Mass. at 254. “Without a valid promissory note, a mortgage is generally not enforceable.” JP Morgan Chase & Co., Inc. v. Casarano, 81 Mass. App. Ct. 353, 355-356 (2012).

This analysis would appear to be particularly applicable to the enforcement of obligations under the shortened 6 year statute of limitations applicable to promissory notes under the Supreme Judicial Court’s 2013 decision in Premier Capital, LLC v KMZ,Inc, particularly as regards the enforcement of secured obligations due on demand where the statute of limitations runs from the date of issuance (subject to extension through partial payments).