The Texas Supreme Court recently addressed a noteworthy case, Moore v. Wells Fargo Bank, No. 23-0525, 2024 WL 735927 (Tex. February 23, 2024), involving the simultaneous rescission and reacceleration of a loan, ruling that such actions reset the foreclosure statute of limitations. In the case of Linda and Thomas Moore, who defaulted on their home loan and filed for several bankruptcies, the loan owner and servicer accelerated the loan. The defendants later issued notices rescinding the acceleration and reaccelerating the loan. The Moores argued that the foreclosure statute of limitations had expired due to the rescission notices, which also included notices of reacceleration. A federal district court ruled against the plaintiffs leading to their appeal and certification of questions to the Texas Supreme Court by the Fifth Circuit. The key question addressed was whether a lender could simultaneously rescind a prior acceleration and reaccelerate a loan and could reacceleration reset the limitations period under Texas Civil Practice and Remedies Code Section 16.038. The Texas Supreme Court confirmed that under Tex. Civ. Prac. & Rem. Code §16.038, a lender can rescind the acceleration, and this can reset the limitation period. The Texas Supreme Court then held that a rescission in compliance with the statute resets the limitations period, even if combined with a notice of reacceleration, allowing lenders to rescind and reaccelerate a loan simultaneously.
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