Deals & development · 10/23/2026
Debt buyers pay NY over $480,000 to settle 'zombie' mortgage claims
The office of New York Attorney General Letitia James secured more than $480,000 from more than two dozen affiliates of asset manager Shelving Rock. The state said the companies tried to collect missed payments on old mortgages after the statute of limitations ended. New York is the latest state to address foreclosures and questionable collections tied to these 'zombie' loans.
Reported by Crain's New YorkRead the original ↗
What happened
New York State has settled claims against a group of debt buyers over collection attempts on old mortgages. Crain's New York reported the story on October 23, 2026.
According to the office of Attorney General Letitia James, more than two dozen affiliates of the asset manager Shelving Rock paid a fine to resolve the state's claims. The Attorney General's office said it secured more than $480,000 from the group.
The state alleged that the companies broke state law by trying to collect missed mortgage payments long after the statute of limitations had run out. These are often called "zombie" loans: mortgages taken out before the 2008 housing market collapse that then sat dormant for years.
Crain's reported that New York is the latest state to act on a nationwide wave of foreclosures and questionable debt collection tied to these loans.
Key facts
- Agency
- Office of New York Attorney General Letitia James
- Companies
- More than two dozen affiliates of asset manager Shelving Rock
- Amount secured
- More than $480,000
- Allegation
- Trying to collect missed payments on old mortgages after the statute of limitations ended
- Loans involved
- "Zombie" mortgages taken out before the 2008 housing collapse that lay dormant for years
- Reported by
- Crain's New York, October 23, 2026
What it means
Buyers and owners
Owners with an old mortgage from before 2008 that went quiet for years should know the state has acted against collection on time-barred debt. A sudden demand on a long-dormant loan is worth checking with a lawyer or housing counselor before paying.
Landlords
Small landlords who own homes or small buildings carrying older second mortgages may face the same kind of collection or foreclosure attempts. Confirm whether a debt is still legally collectible before responding.
The highlights
- More than two dozen affiliates of asset manager Shelving Rock paid the fine.
- The state said they sought old mortgage payments after the statute of limitations ended.
- Zombie loans are mortgages taken out before the 2008 crash that lay dormant for years.
Why it matters Landlords
Owners with old, dormant mortgages may face collection demands that state law no longer allows.
What to do: Get legal advice before paying a debt buyer on a long-dormant mortgage.
Not known yet
- Whether any homeowners will receive money from the settlement
- How many New York borrowers were contacted or affected
- Which specific state laws the companies were alleged to have violated
- Whether the companies admitted wrongdoing or must change collection practices
Background
New York law sets time limits on how long a lender can wait before suing to collect or foreclose on a defaulted mortgage. In recent years the state has tightened those rules to stop lenders and debt buyers from restarting old claims. The Attorney General's office enforces state consumer protection laws and can bring cases against debt collectors. Nonprofit housing counselors and legal services groups in the city often help owners review old mortgage demands.
Summary written by Bulwark from Crain's New York’s reporting. The original story is at crainsnewyork.com. This is general information, not legal advice.
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Photo: Andre Carrotflower, CC BY-SA 4.0