In a landmark set of decisions this past November, the New York Court of Appeals delivered what many legal observers are calling one of the most significant clarifications in New York foreclosure law in years. The court’s rulings in Article 13 LLC v. Ponce de Leon Fed. Bank and Van Dyke v. U.S. Bank upheld the Foreclosure Abuse Prevention Act (FAPA), holding that it applies retroactively and that its application does not violate constitutional protections, a victory for homeowners and represents a major shift in how foreclosure actions are to be litigated in the state by restricting mortgage lenders ability to reset the statute of limitations.
What Is FAPA and Why It Matters
FAPA was enacted on December 30, 2022, in response to longstanding concerns about foreclosure abuses in New York. Prior to FAPA, lenders could often restart foreclosure proceedings, even after voluntarily discontinuing them, effectively resetting the six-year statute of limitations and extending the time they had to foreclose on a property. This practice, critics argued, allowed some lenders to drag homeowners through repeated foreclosure actions on stale claims, even where years had passed and the statutory time limits ought to have run.
To address that loophole, FAPA changed key provisions of New York’s Civil Practice Law and Rules (CPLR) to limit a lender’s ability to reset the statute of limitations or “de-accelerate” a foreclosure action merely by withdrawing it or taking other procedural steps. Under FAPA, absent an express judicial determination that acceleration was invalid, lenders are estopped from arguing that an earlier foreclosure did not properly trigger the statute of limitations. If the six year statute of limitations, triggered by the acceleration of the loan, has lapsed, the lender is then unable to bring a new foreclosure action.
Pre-FAPA Foreclosure Landscape
Before the enactment of FAPA, the foreclosure landscape in New York strongly favored lenders. Mortgage lenders routinely relied on voluntary discontinuances and so-called “de-acceleration” tactics to undo prior foreclosure actions after they had accelerated the mortgage debt. By discontinuing a case, often years after it was filed, lenders were able to argue that the loan was no longer accelerated, effectively resetting the six-year statute of limitations and giving themselves a fresh opportunity to restart foreclosure proceedings. This practice allowed lenders to bring multiple, successive foreclosure actions based on the same default, even after long periods of inactivity. For homeowners, the result was prolonged uncertainty, repeated litigation, mounting legal costs, and years of living under the constant threat of foreclosure without final resolution.
The Court of Appeals’ Ruling
The core issue before the Court of Appeals was whether FAPA’s provisions could be applied retroactively to foreclosure actions that were already underway, especially those that began years before FAPA became law. In both Article 13 LLC and Van Dyke, it was argued that senior mortgage liens were time-barred, since prior foreclosure actions started long ago had time-barred enforcement because the limitations clock could no longer be reset under FAPA.
On November 25, 2025, the Court of Appeals answered that question in the affirmative, holding that FAPA applies retroactively to foreclosure actions in which a final judgment of foreclosure and sale has not yet been enforced. The court interpreted the statute’s language and legislative intent as expressing a clear intent that FAPA apply immediately and broadly, even in cases that were pending at the time the law was enacted.
Critically, the court also rejected constitutional challenges to the retroactive application of the law, holding that the retroactivity did not violate substantive or procedural due process. The court reasoned that FAPA did not alter the six-year statute of limitations itself, but rather clarified longstanding estoppel doctrines governing how the timer runs, and that lenders did not possess a vested right to use procedural maneuvers to extend that timer indefinitely.
Why This Matters for Homeowners
These decisions have immediate, practical consequences. Thousands of foreclosure actions remain pending in courts across New York, many involving loans that were first accelerated more than a decade ago. Under the court’s ruling, if a prior foreclosure action was filed and later discontinued or stalled without a final foreclosure judgment, the lender cannot restart the foreclosure clock now that FAPA is in effect. This protects borrowers from endless litigation and potential loss of their homes when statutory time limits should have run.
Why This Matters for Lenders
The opinion signals a tougher regulatory environment for mortgage servicers and real estate investors. Before pursuing foreclosure on a loan with one or more prior foreclosure filings, lenders must now carefully assess whether previous actions triggered the limitations period in a way that FAPA regulates, or risk having a court dismiss their suit outright as time barred. Many in the industry are reviewing how this decision may affect portfolio valuations and are re-evaluating their foreclosure strategies.
A Legal Turning Points
The Court of Appeals has reaffirmed the New York Legislature’s authority to step in and curb foreclosure practices that were widely viewed as abusive and unfair to homeowners. By closing loopholes that previously allowed lenders to manipulate acceleration and statute of limitations rules, FAPA has fundamentally shifted foreclosure litigation strategy across the state, forcing lenders to pursue cases more diligently and within clearly defined timeframes. By upholding FAPA’s reach and constitutionality, the Court of Appeals has sent a clear message about the state’s commitment to curbing unfair foreclosure. This decision will shape foreclosure litigation for years to come.
Contact The Law Offices of David I. Pankin, P.C.
If you a homeowner at risk of or in foreclosure, contact The Law Offices of David I. Pankin, P.C. today to review your options. We can be reached at (888) 529-9600 or by using our easy online contact form.
