FAPA
was
passed
in
2022
in
an
attempt
to
stop
banks
from
endlessly
trying
to
foreclose
on
a
homeowner
for
the
same
debt.
The
issue
stemmed
from
the
2008
housing
crisis
when
lenders
filed
and
later
dropped
thousands
of
foreclosure
cases,
often
allowing
the
six-year
limitations
period
to
expire.

As
a
result,
many
lenders
later
attempted
to
file
new
foreclosure
actions
on
the
same
loans,
arguing
that
earlier
cases
did
not
properly
trigger
the
statute
of
limitations
because
the
wrong
party
brought
the
case
or
because
the
loan
was
not
validly
accelerated.

The
Court
of
Appeals

rejected
these
arguments,
pointing
to
language
in
the
statute
stating
that
the
law
“shall
take
effect
immediately”
and
applies
to
all
foreclosure
actions
without
an
enforced
final
judgment.

The
court
also
said
applying
the
law
retroactively
is
constitutional,
noting
that
lenders
were
responsible
for
the
timing
and
handling
of
prior
cases.

The
rulings
are
expected
to
have
significant
implications
for
foreclosure
litigation
in

New
York,
with
homeowners
now
having
stronger
protections
against
old
or
repeated
foreclosure
attempts.

For
lenders,
the
ruling
makes
clear
that
proper
legal
steps
and
documentation
are
required
before
moving
forward
on
stalled
or
dismissed
foreclosures.

“These
decisions
are
a
huge
win
for
New
York
homeowners
who,
for
too
long,
have
been
preyed
upon
by
lenders
seeking
to
manipulate
the
statute
of
limitations
and
relitigate
foreclosure
actions
that
have
long
been
dismissed
or
abandoned,”
said
Jacob
Inwald,
director
of
litigation-economic
justice
at

Legal
Services
NYC.

“Governor
Hochul
and
state
legislators
wisely
closed
the
loophole
that
allowed
lenders
to
refile
time-barred
foreclosure
actions
by
passing
the
Foreclosure
Abuse
Prevention
Act
and
the
Court
of
Appeals
correctly
reinforced
the
law’s
protections,”
he
added.
“Struggling
New
York
homeowners
can
breathe
a
little
easier
knowing
their
rights
against
time-barred
foreclosure
actions
are
being
upheld.”