By Michelle R. Rodriquez, Esq.
Wright, Finlay & Zak, LLP

In the immortal words of Toni Stern as sung by Carole King, “It’s too late baby, now it’s too late.”1 But is it really too late to collect on your California note and deed of trust? This question has been raised recently in light of the Consumer Financial Protection Bureau (“CFPB”)’s Advisory Opinion on Time-Barred Debt2 (“Advisory Opinion”). In the Advisory Opinion, the CFPB states that collecting on time-barred debt may be a violation of the Fair Debt Collection Practices Act (“FDCPA”) The Advisory Opinion was prompted by the attempt of debt collectors to collect loans that were made prior to the “Great Recession.” In some instances, debt holders left the loans dormant and did not attempt to collect the debt for sometimes ten years or longer. This article will break down the rules regarding the statute of limitations for deeds of trust and mortgages in California, some other time-related ways a borrower could challenge a foreclosure or collection action and review the CFPB’s Advisory Opinion its ramifications for private lenders in California.

Statutes of Limitations on Deeds of Trust and Mortgages
Non-judicial Foreclosure – Deeds of Trust

Most lenders are aware that the differences between mortgages and deeds of trust are few, or, arguably, non-existent. The statute of limitations is one area where courts have held that there is a difference. The rationale behind the difference between a mortgage and deed of trust is interesting, but not entirely relevant here.3 For a non-judicial foreclosure of a deed of LLPtrust, the trustee’s sale is not barred by the expiration of the statute of limitations on the underlying debt,4 although the trustor can assert the passage of time as a bar to the trustee’s sale under other theories, such as the Marketable Title Act5. This is because the “trust title” under a deed of trust is considered to last as long as the underlying trust purpose survives.6

Under the Marketable Title Act, “the duration of a debt secured by a deed of trust is limited to 10 years after the final maturity date of the debt, if that date can be ascertained from the recorded evidence of indebtedness (i.e., the mortgage or deed of trust), or, if no maturity date is evident, to 60 years after the date of recordation of the instrument.”7 In addition, “[u]nder CC §882.020(c), the time periods in the statute may also be extended “in the same manner and to the same extent” as a waiver under Cal. Code of Civil Proc. § 360.5. Many California deeds of trust contain a waiver of the statute of limitations to the fullest extent permitted by law. For such deeds of trust, even if the trustor executes no subsequent waiver of the statute of limitations or if the deed of trust beneficiary records no subsequent notice of intent to preserve interest, the applicable 10- or 60-year limit of CC §882.020 is probably extended to 14 years or 64 years.”8

Non-judicial Foreclosure – Mortgages

A mortgage, however, is considered a lien on real property, and only lasts as long as an action could be brought on the underlying debt. In California, in the case of non-negotiable notes, the statute of limitations if four years.9 For negotiable notes, the statute of limitations is 6 years.10

Judicial Foreclosure – Both Deeds of Trust and Mortgages

Neither a deed of trust nor a mortgage can be judicially foreclosed after the statute of limitations has expired on enforcing the underlying obligation.11 The statutes of limitations for a note are stated above.

Equitable Estoppel and Laches

Equitable Estoppel and laches are two defenses that the borrower could raise regarding the passage of time in filing a judicial foreclosure. Judicial foreclosure is considered to be equitable in nature, and therefore these equitable affirmative defenses may be raised.12

Equitable Estoppel

The elements to a defense of equitable estoppel are “(1) The party to be estopped must know the facts; (2) he must intend that his conduct shall be acted upon, or must so act that the party asserting the estoppel had the right to believe that it was so intended; (3) the party asserting the estoppel must be ignorant of the true state of facts; and, (4) he must rely upon the conduct to his injury’….” (DRG/Beverly Hills, Ltd. v. Chopstix Dim Sum Cafe & Takeout III, Ltd. (1994) 30 Cal. App. 4th 54, 59 [35 Cal. Rptr. 2d 515], citation omitted.)”13 In the case Nicolopulos v. Superior Court, the borrower didn’t realize that the lender could delay in making a claim for up to 60 years, and subsequently raised the defense of equitable estoppel when the lender started a non-judicial foreclosure, the borrower sued and raised equitable estoppel. The court went through an analysis of the elements and concluded that the borrower was aware of all of the facts known to the lender, and was only mistaken about the law. There was no basis to estop the lender from relying on the 60-year statute of limitations.14


The elements of defense of laches are an unreasonable delay plus either 1) acquiescence in the act about which the plaintiff complains, or 2) prejudice to the defendant resulting from the delay.15 The Nicolopulos case addresses this as well, stating, “it is difficult to discern any particular prejudice or inequity to Nicolopulos. He signed and benefited from the note, signed the deed of trust recorded against his property, and did not repay the obligation. He misjudged his legal position, but that circumstance cannot be blamed upon [the lender].”16 Of course, the facts of each individual case should be considered to assess the risk of a defense of laches being successful. The longer the lender waits to foreclose, the more likely that that delay could be considered “unreasonable.” Also, if the lender doesn’t attempt to collect on the note, this could help the borrower to prove that the lender “acquiesced” in the borrower’s failure to pay the note.17 There is some suggestion in the caselaw that a defense of laches would not be applicable in a non-judicial foreclosure situation where no lawsuit has been filed.18

Time-Barred Debt under the Fair Debt Collection Practices Act

The CFPB’s Advisory Opinion regarding collection or attempted collection of time-barred debt states that debt-collectors under the FDCPA are prohibited from collecting or attempting to collect time-barred debt. The definition of “debt collector” under the FDCPA is very broad – it includes “any person who uses any instrumentality of interstate commerce or the mails in any business the purpose of which is the collection of any debts, or who regularly collects or attempts to collect, directly or indirectly debts owed or due to another. Or anyone who uses another name in the process of collecting their own debts.”19 The definition of a FDCPA debt collector excludes a person collecting a debt for another concerning a debt that was not in default at the time the person obtained the debt, or concerning a debt that such person originated.20 The definition of debt only includes debt primarily for personal, family, or household purposes.21 Therefore, the collection of the business purpose loans is exempt.

Unfair, Abuse, or Abusive Acts and Practice (“UDAAP”)

Attempting to collect time-barred debt could also be a violation of the federal and state UDAAP laws.


If a deed of trust recorded in California does not contain a maturity date, then the lender has up to 60, and possibly even 64 years to foreclose non-judicially, but the longer the lender waits, the more likely it is that a borrower could successfully raise a defense of equitable estoppel or laches. It is a good idea for the lender to send the borrower statements notifying them of the amounts due on the loan – once per year at minimum. The notice should state that if the borrower is in bankruptcy, or if personal liability for their mortgage or deed of trust debt has been discharged in bankruptcy, then the notice is not an attempt to collect a debt and is for informational purposes only. For consumer loan lenders, care should be taken when attempting to collect old debts, to determine whether or not the FDCPA applies to the situation, and if so, if any restrictions on collection apply.


1. Carole King, It’s Too Late, on Tapestry (Ode Records, 1971).
2. 88 FR 26475
3. For more information on why a mortgage is different from a deed of trust in California, see Roger Bernhardt, California Mortgage, Deeds of Trust, and Foreclosure Litigation, § 7.32 and 7.33, citing Flack v Boland 11 C2d 103 (1938) and Sipe v McKenna. 88 CA2d 1001 (1948).
4. Id.
5. Cal. Civil Code §§882.020-887.090
6. Hohn v Riverside County Flood Control & Water Conserv. Dist. 228 CA2d 605, (1964).
7. Cal. Civil Code §§882.020(a)(1)-(2)
8. Bernhardt, §7.34.
9. Wells v Harter, 56 C 342, (1880).
10. Cal. Com. Code §3118.
11. Cal. Civ. Code § 2911; Miller v Provost (1994) 26 CA4th 1703, 1707, regarding judicial foreclosure of a deed of trust.
12 Kirkpatrick v Stelling, 36 CA2d 658(1940); Brichetto v Raney, 76 CA 232, (1926).
13. Nicolopulos v. Superior Court, 106 Cal. App. 4th 304, 311 (2003).
14. Id.
15. Johnson v. City of Loma Linda 24 Cal. 4th 61, 68(2000); Board of Administration v. Wilson (1997) 52 Cal. App. 4th 1109, 1126, 61 Cal. Rptr. 2d 207; see In re Marriage of Fogarty & Rasbeary (2000) 78 Cal. App. 4th 1353, 1359, 93 Cal. Rptr. 2d 653; Vernon Fire Fighters Assn. v. City of Vernon (1986) 178 Cal. App. 3d 710, 719, 223 Cal. Rptr. 871
16. Nicolopulos at 312.
17. See Royalton Woods Homeowner Ass’n v. Soholt, 2019 Tenn. App. LEXIS 46, 2019 WL 366525, which involves an HOA foreclosing on an HOA lien.
18. Nicolopulos at 312.
19. 12 CFR 1006.2(i)(1)
20. 12 CFR 1006.2(i)(2)(VI). There are other exclusions to the definition of a debt collector under Regulation F; See Regulation F (12 CFR Part 1006) for more details.
21. 12 CFR 1006.2(h)