Bank's Acceptance of Late Payments in Commercial Mortgage Default Does Not Modify Mortgage, NJ Appeals Court Rules
In a recent decision that merits the attention of borrowers and lenders in commercial real estate foreclosures, the New Jersey Appellate Division held that a lender's acceptance of numerous late payments did not constitute a modification to the mortgage or result in curing the borrower's mortgage default. Bank of America v. Princeton Park Associates, L.L.C. , Docket No. A-0927-11T3 (App Div., November 8, 2012). Consequently, the Appellate Division affirmed the trial court's granting of summary judgment in favor of the lender. The facts of the case are rather straightforward. Princeton Park Associates involved a commercial real estate loan transaction. The lender’s loan documents contained the standard default and acceleration provisions. Also, the promissory note included the following provisions: (i) no failure by the lender to accelerate the debt pursuant to the default provisions would constitute a waiver of the lender’s rights to insi...