A $350,000 loan, two maturity dates – find out how a paperwork glitch cost a lender its foreclosure
A simple date mismatch in loan documents just cost a lender its foreclosure – reminding mortgage pros everywhere that paperwork precision is everything.
That’s the big takeaway from the October 21, 2025, decision by the Washington Court of Appeals in the case of Jerry and Judith Ross versus ARCPE 1, LLC. The case began in 2007, when the Rosses borrowed $350,000, secured by a promissory note and a deed of trust. The promissory note stated the loan would mature on January 31, 2017, while the deed of trust listed February 28, 2017, as the maturity date.
By 2023, the Rosses had not repaid the loan. ARCPE 1, LLC, which had acquired the loan from Morgan Stanley Credit Corporation, initiated nonjudicial foreclosure proceedings in February 2023. ARCPE argued that the February 28 date in the deed of trust controlled, making its foreclosure timely under Washington’s six-year statute of limitations for written contracts. The Rosses, however, contended that the statute of limitations began on January 31, 2017, the maturity date in the promissory note, making ARCPE’s foreclosure attempt eight days too late.
Both parties filed for summary judgment. The trial court ruled in favor of the Rosses, determining that the promissory note’s maturity date controlled the statute of limitations. ARCPE appealed, maintaining that the deed of trust’s later date should apply. The appeals court, however, affirmed the trial court’s decision on October 21, 2025, holding that the promissory note’s maturity date governs when the statute of limitations begins to run for foreclosure actions, not the deed of trust’s date.
The court explained that the promissory note represents the borrower’s obligation to pay, while the deed of trust merely secures that obligation. Because the note and the deed of trust conflicted, the court found that the maturity date in the note controlled. The court also awarded attorney fees to the Rosses for both the trial and appeal, as provided for in the loan documents and under Washington law.
The lesson is straightforward: when loan documents contain conflicting terms, especially regarding maturity dates, the promissory note’s terms will control the enforceability of the debt and the timing for foreclosure. This decision underscores the importance of ensuring consistency across all loan documents to avoid losing foreclosure rights due to technicalities.
Anyone managing loan portfolios or handling foreclosures should take note – review and align all documentation carefully, because in this business, a few days’ difference on paper can mean the difference between collecting and coming up empty.
