And If There Is No Acceleration Provision?

It must be conceded that this review may be more of an intellectual exercise than anything, but because it is a reality as well, there is value in the exploration.

Unimaginable is the word which might apply if the question asked here was whether a note and mortgage prepared by a lending institution could be missing an acceleration clause. Possible?  Theoretically.  As a practical matter, we don’t expect to see it. But there are thousands of mortgages prepared by casual lenders, families, small businesses, attorneys who do not practice in the field of real estate, among others.

 An actual case makes the point [Estate of Essig v. Essig, 196 A.D.3d 1055, 152 N.Y.S.3d 191 (A.D. Dept. 4 Dept. 2021).]  In the usual instance, the mortgagee has the standard luxury of knowing that when a default is encountered, the right is possessed to declare the full balance of the mortgage due even though the loan was otherwise payable in installments.  That arises, however, not by some custom, but by precise language in the note and/or mortgage which grants that authority.

While extremely rare, and as noted, it remains possible that a mortgage would not have an acceleration clause.  If that situation  is encountered (as in the case cited) the mortgage holder is entitled to recover only past due installments and is not authorized to declare an acceleration.  Rather, each default on each installment is a separate cause of action.  Such a situation requires delay waiting for payments to accrue or multiple actions to pursue those past due installments, all of which would be unpalatable for any lender.  Such state of affairs will only seldom be encountered, but if it is, the rule is stated here.

Mr. Bergman, author of the four-volume treatise, Bergman on New York Mortgage Foreclosures, LexisNexis Matthew Bender (rev. 2024), is a partner with Berkman, Henoch, Peterson & Peddy, P.C. in Garden City, New York. He is also a member of the USFN, The American College of Real Estate Lawyers, The American College of Mortgage Attorneys, an adviser to the New York Times on foreclosure issues and writes a regular servicing column for the New York Law Journal. He is AV rated by Martindale-Hubbell, his biography appears in Who’s Who In American Law and he has been for years listed in Best Lawyers In America and New York Super Lawyers.