On May 4, the U.S. Court of Appeals for the Sixth Circuit affirmed a lower court’s decision in a judicial foreclosure action, holding that a bank’s lawsuit was barred by Tennessee’s 10-year statute of limitations for actions to enforce liens on real property. The appellate court also refused to establish an equitable lien on the property in favor of the bank. According to the opinion, the home equity line of credit at issue in the case matured in 2007, requiring a final balloon payment, but the bank did not demand this payment, refinance the loan, or foreclose on the property. Instead, the bank continued to accept monthly interest payments totaling around $100,000 until 2017. The opinion reflected that the bank did not contend there to be a written instrument showing an extension of the loan or that such an extension was recorded. Rather, the bank raised several arguments, including that there was an oral modification to the loan and that it had the unilateral right to extend the loan based on “a future advances provision that could extend the maturity date for up to twenty years.” The bank further argued that the defendants’ monthly interest payments excused any writing requirement and evidenced an agreement to extend the loan’s maturity date. The appellate court disagreed, concluding that because the bank could not show, as a matter of law, that the loan’s maturity date was extended, its suit is untimely. The appellate court stated  that the bank was aware that the loan “was in default as early as 2011 (well within the statute of limitations period) but took no action to foreclose or refinance.” The 6th Circuit further noted that if the bank had “simply memorialized an extension to the [l]oan’s maturity date in writing as required by Tenn. Code Ann. § 28-2-111(c), it would not be in this situation.”