Court dumps HSBC foreclosure claim over decade-long default delay

HSBC missed the window by roughly 11 years. 

CitiMortgage finally called the question in July 2024, moving to dismiss the complaint against it as abandoned. The Supreme Court, Kings County, granted the motion in a November 21, 2024 order. HSBC appealed. 

On appeal, HSBC pointed to two reasons for the delay: certain stays in the foreclosure action and a separate quiet title action CitiMortgage had filed over the same Brooklyn property. The appellate panel did not buy either one. The court found HSBC “did not account for gaps of time where years of inactivity passed” and failed to show how the quiet title litigation “hindered its ability to seek a default judgment.” 

Those two findings effectively closed the only exit available. New York courts do allow one narrow exception to mandatory dismissal: a plaintiff can survive by showing both a reasonable excuse for the delay and a potentially meritorious cause of action. HSBC cleared neither bar. 

Justices affirmed unanimously, with costs to CitiMortgage. The panel leaned on a familiar line of cases enforcing the abandonment rule against large lenders – including three prior HSBC cases: HSBC Bank USA, N.A. v Whaley, HSBC Bank USA, N.A. v Grella, and HSBC Bank USA, N.A. v Cross.