New York Foreclosure Abuse Prevention Act: What Consumers Need To Know

In response to the New York Court of Appeals’ ruling in Freedom Mortgage Corp. v. Engel, which essentially gave lenders and loan servicers seeking to foreclose New York mortgages free reign to skirt the six-year statute of limitations by allowing them to “revoke” the acceleration of the mortgage debt and start a new foreclosure lawsuit, the New York Legislature enacted the Foreclosure Abuse Prevention Act (FAPA) to (among other things) reverse the decision made by the Court of Appeals and hold lenders and servicers to the same legal standards as all other New York litigants, who must bring lawsuits within the statutes of limitations mandated by New York law.

The attorneys at Fadullon Dizon Krul LLP want borrowers facing foreclosure to be aware that FAPA can have significant and (likely) positive impacts on the foreclosure lawsuits they are facing. The legal team at Fadullon Dizon Krul LLP is ready to analyze your case to determine whether any part of the newly-enacted FAPA legislation can help you prevent foreclosure.

What Does FAPA Do?

FAPA makes it more difficult for lenders and servicers to foreclose in certain situations.

FAPA is intended by the Legislature to apply retroactively (in cases wherein a judgment of foreclosure and sale has not been enforced) and states, in essence, that if a lender or servicer voluntarily discontinues a foreclosure lawsuit or otherwise “revokes” its election to accelerate the mortgage debt, the six-year statute of limitations on the foreclosure action will continue to run despite the lender or servicer’s discontinuance of a foreclosure lawsuit or other attempt at “revocation” of the acceleration of the mortgage debt (CPLR3217 [e]; CPLR 203). This effectively prevents the lender or servicer from starting to foreclose the same mortgage after six years have passed from the date the loan was initially accelerated.

FAPA also aims to curb foreclosure litigation abuses by lenders and servicers and to level the playing field in foreclosure litigation by, among other things:

• Preventing lenders and servicers from claiming that a prior acceleration of a mortgage debt was invalid when a borrower raises a statute of limitations defense, unless it was specifically determined by a court in a prior action that said acceleration was, in fact, invalid (CPLR 213 [4]);
• Mandating that if a lawsuit to foreclose a mortgage or recover any part of the mortgage debt is found by a court to be barred by the statute of limitations, that any other lawsuit seeking to foreclose the mortgage or recover any part of the same mortgage debt would also be barred by the statute of limitations (RPAPL § 1301); and
• Preventing lenders and servicers from relying on the “savings clause” (which gave lenders an additional six months to re-start a foreclosure lawsuit after a previous foreclosure lawsuit was dismissed), where, among other things, the lender or servicer neglected to prosecute the previous lawsuit, voluntarily discontinued the previous lawsuit, or failed to obtain jurisdiction over the defendant in the previous lawsuit by failing to serve the defendant with process (CPLR 205-a).

Because the mechanics of FAPA are complex, it is important to seek legal guidance to fully understand how FAPA may apply to your situation, whether you are seeking to modify a mortgage to avoid foreclosure, have a foreclosure case dismissed, a mortgage discharged as barred by the statute of limitations, or accomplish some other goal in this area of law.

Does FAPA Apply Retroactively In New York?

New York Court of Appeals, the state’s highest court, recently agreed to address whether the Foreclosure Abuse Prevention Act (FAPA) applies retroactively, years after declining to take up the matter. This decision comes at a critical time, as foreclosure litigation continues to evolve under the weight of FAPA’s sweeping provisions.

On May 20, 2025, the court accepted review of two major cases: Van Dyke v. U.S. Bank, N.A. and Article 13 LLC v. Ponce de Leon Federal Bank. Both challenge the constitutionality of Section 7 of FAPA, which limits the defenses mortgage lenders can raise when facing claims that a foreclosure action is time-barred under the statute of limitations.

Under New York law, once a lender accelerates a mortgage loan, meaning it demands full repayment, the lender has six years to foreclose. FAPA, which became law on Dec. 30, 2022, sharply limited lenders’ ability to pause or restart that six-year clock. Crucially, it also stopped lenders from arguing that the statute of limitations never began in the first place.

Now, the core legal question is whether these restrictions can apply to actions taken before FAPA was enacted. Retroactive application would mean that lenders’ earlier litigation strategies could now be judged illegal, even if they were valid at the time.

Supporters of retroactivity argue:

• FAPA was passed to fix systemic abuses in foreclosure proceedings.
• Legislative history suggests the law was meant to undo prior court decisions that permitted repeated resets of the foreclosure timeline.
• New York’s intermediate appellate courts have already found strong evidence of legislative intent for retroactivity.

However, the opponents argue:

• Retroactive application is unconstitutional, violating due process under both the U.S. and New York constitutions.
• It unfairly punishes lenders for conduct that was legal when it occurred.
• It upends established rights and could unravel thousands of finalized cases.

First Example Case: Van Dyke V. U.S. Bank, N.A.

Filed before FAPA was enacted, this title action involves a borrower seeking to cancel her mortgage. She argued that a 2009 foreclosure filing started the six-year statute of limitations, and since no new foreclosure was filed in time, the debt was unenforceable. The trial court agreed and retroactively applied FAPA, a decision upheld by the appellate court in February 2025. The issue now lies with the Court of Appeals.

Second Example Case: Article 13 LLC V. Ponce De Leon Federal Bank

This case began in 2020 in federal court. A junior mortgage holder claimed that a 2007 foreclosure filing by a senior lender triggered the statute of limitations, which had since expired. Initially, the court denied the request to expunge the senior mortgage. However, after FAPA’s passage, the court reversed itself and applied the law retroactively.

On appeal, the 2nd U.S. Circuit Court of Appeals paused the case and asked the New York Court of Appeals to answer two critical questions:

• Does Section 7 of FAPA apply to foreclosure actions started before its enactment?
• Does retroactive enforcement violate due process under the New York Constitution?

The answers to these questions will shape the future of foreclosure litigation in New York and determine whether FAPA’s protections can truly reach into the past. The New York Court of Appeals will next hear the arguments in fall 2025, marking the first time it will formally rule on FAPA’s retroactivity. However, even after its decision, the Second Circuit retains the authority to decide whether FAPA violates the U.S. Constitution.

If this is your current dilemma, Fadullon Dizon Krul LLP is here to help. Our attorneys can guide you on how the evolving laws might apply to your situation.

When You Are Facing Foreclosure In New York, Get Dedicated Legal Guidance

If you are facing foreclosure, talk to one of the firm’s lawyers. They understand everything there is to know about foreclosure defense. Call 347-967-4087 or use the online contact form to schedule an appointment at the Woodside or Jericho offices.

The firm takes clients from the boroughs of Brooklyn, Bronx, Manhattan, Queens and Staten Island as well as Westchester, Nassau and Suffolk counties.