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SettlementMedium Risk

New York Attorney General Settlement Over Collection of Time-Barred Mortgage Debt

BCMB1 Trust, First Age LLC, NS194 LLC, Second Start LLC, and Southern MBA TrustOctober 23, 2026New York Attorney General

Penalty Amount

$240,000

Summary

The New York Attorney General investigated a group of debt buyers for filing foreclosure actions seeking payment of long-expired mortgage debts. The companies agreed to pay $240,000 in penalties and more than $242,000 in consumer restitution, stop seeking payment of time-barred debts, and amend claims in pending foreclosure cases.

Remedy

The companies must pay $240,000 in penalties and more than $242,000 in restitution to affected consumers, stop attempting to collect time-barred debts, and amend claims in ongoing foreclosure proceedings to exclude time-barred amounts.

Monetary PenaltyConsumer RefundsInjunction

Contract Impact

Review debt-purchase, mortgage-servicing, and third-party collections agreements for clear limits on collecting time-barred debt, required validation of debt age and enforceability before collection or foreclosure, and obligations to amend or withdraw claims when debts are legally unenforceable. Add representations and warranties about the accuracy and legal status of assigned accounts, indemnities and audit rights for improper collection activity, and procedures for consumer restitution and complaint escalation. This action does not concern privacy practices, so privacy-specific clauses are not implicated by the reported conduct.

Contract Search Terms

time-barred debt collectiondebt collection limitations periodmortgage servicing agreementdebt purchaser assignmentconsumer restitution obligationsforeclosure claim amendmentcollection practices representations and warrantiesdispute escalation and complaint handling

Laws Cited

New York statute of limitations for debt collection

Violation Types

Entity Details

Entity

BCMB1 Trust, First Age LLC, NS194 LLC, Second Start LLC, and Southern MBA Trust

Industry

Financial Services

Official Sources

Source Evidence

Entity Name
"entre ellas BCMB1 Trust, First Age LLC, NS194 LLC, Second Start LLC, Southern MBA Trust y sus entidades afiliadas"
Fine Amount
"los compradores de deuda están obligados a pagar $240,000 dólares en sanciones"
Laws Cited
"violando la ley de prescripción de Nueva York que impide a los prestamistas cobrar pagos de deudas con más de seis años de vencidas"
Violation Types
"presentar demandas de ejecución hipotecaria que exigían el pago de deudas que ya no eran legalmente exigibles"
Event Date
"October 23, 2026"

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