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July 23, 2025
Foreclosure Abuse Prevention Act in New York Court of Appeals
Ryan Hertzel
After months of prior refusals, The U.S. Court of Appeals for the Second Circuit, in the matter of Article 13 LLC v. Ponce De Leon Fed. Bank, 132 F. 4th 586, 594 (2d Cir. 2025), certified the following questions to the New York Court of Appeals on March 25, 2025:
- Whether, or to what extent does, Section 7 of the Foreclosure Abuse Prevention Act [FAPA], codified at N.Y. C.P.L.R. § 213(4)(b), apply to foreclosure actions commenced before the statute's enactment?
- Whether FAPA's retroactive application violates the right to substantive and procedural due process under the New York Constitution, N.Y. Const., art. I, § 6?
Even more notably, the U.S. Supreme Court may involve itself by accepting the petition for certiorari filed in U.S. Bank, N.A. v. Fox which presented the questions:
- Does retroactive application of CPLR 205- a(a) violate the Takings Clause of the Fifth Amendment to the United States Constitution?
- Does retroactive application of CPLR 205-a(a) violate the Due Process Clause of the Fourteenth Amendment to the United States Constitution?
Following its enactment on December 30, 2022, the State’s Foreclosure Abuse Prevention Act (FAPA) has caused furious debate in the legal sector (at least within our niche). FAPA amended multiple provisions of the law specific to the statute of limitations. It also enacted CPLR §205-a which revised, restricted, and muddled, the “savings clause” criteria exclusively for residential mortgage foreclosure actions. While each of the individual changes has a direct effect on a mortgage foreclosure action, the elephant in the room is its retroactive application, currently at question here. The law regarding statute of limitations to foreclose in New York progressed organically over decades until FAPA dismantled it with the stroke of a pen. Now, any minor misstep in a foreclosure action has the potential to result in total loss.
While the New York legislature clearly designed and intended for the act to address foreclosure delays and perceived abuses, and to minimize chaos, the resounding effect was the opposite. What ensued was a complicated, risk-assessment dance in the financial services industry. Lenders and servicers are faced with uncertainty as they entertain foreclosure litigation strategy with their counsel, mortgage servicing operations in the secondary market has become a minefield of unknown hazards, and some overwhelmed Courts and Judges are withholding decisions.
We commend the plaintiffs, counsel, and trade association groups who continue to push back on the constitutionality of FAPA and we urge clarity from the Courts on the questions presented to resolve lingering debate. Hill Wallack will continue to monitor developments and provide updates to our clients and friends.
