December 3, 2025
ShareNew York Court of Appeals Confirms Retroactive Application of FAPA in Landmark Foreclosure Rulings
CLIENT ALERT!
New York Court of Appeals Confirms Retroactive Application of FAPA in Landmark Foreclosure Rulings
New York’s highest appellate court just issued opinions confirming the retroactive application of FAPA with emphasis on the New York State Assembly’s efforts to prevent deacceleration and a lender’s ability to reset the statute of limitations when it enacted the current version of FAPA on December 30, 2022.
The Court of Appeals Rulings
The New York Court of Appeals issued eagerly awaited rulings on November 25, 2025, in two matters which were under simultaneous review – Article 13 LLC v. Ponce De Leon Fed. Bank, NY3d, 2025 NY Slip Op 06536, *1 [2025], and Van Dyke v. U.S. Bank, N.A., NY3d, 2025 NY Slip Op 06537, *1 [2025].
The Certified Questions
As discussed at the outset of the Article 13 LLC opinion, the United States Court of Appeals for the Second Circuit certified the following two questions of New York State Law to New York’s highest state appellate court – The Court of Appeals:
- Whether, or to what extent does, Section 7 of the Foreclosure Abuse Prevention Act, 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.
Key Holdings
The Court ruled unfavorably against the appeals brought by the lending industry, holding the Foreclosure Abuse and Prevention Act (commonly referred to as “FAPA”), shall be applied retroactively in foreclosure cases where a final judgment of foreclosure has not been enforced.
This means courts in New York State will apply the operative FAPA law in situations even before the current version of FAPA was enacted on December 30, 2022.
A lender’s ability to “deaccelerate” and reset the limitations period through voluntary discontinuance, otherwise referred to as a dismissal, for example, is severely limited.
Constitutional Challenges Rejected
The Court also rejected all constitutional challenges to FAPA. It emphasized in both opinions that the statutory text and legislative history “plainly manifest” the intent to be applied retroactively, including the state legislature’s planned response to alleged abuses of the foreclosure process by lenders.
Lenders were attempting to attack the strict retroactive aspects of certain sections of FAPA, arguing that FAPA Sections §§ 4, 7, and 8, violate federal constitutional rights to substantive and procedural due process by eliminating a lender’s property interest in a mortgage, and then further by preventing a lender’s ability to prosecute a foreclosure action.
Impact on Lenders
The Court went so far as to echo the reasoning for the current FAPA law, which the Court discussed was intended to prevent a lender’s ability to unilaterally revoke a prior acceleration or otherwise reset the statute of limitations by a voluntary withdrawal of an action under the then operative appellate decision of Freedom Mtge. Corp. v Engel, 37 NY3d 1, 19 [2021].
A lender’s efforts to revoke an acceleration will likely not be successful unless there is a clear loan modification agreement, clearly documented reinstatement of the loan, or other agreement or stipulation between the lender and the borrower wherein the borrower clearly acknowledges the debt and revocation of the prior acceleration.
Practical Implications
Lenders and counsel must apply diligence in situations where there was a prior acceleration event, such as a case filing, identify when such occurred, identify the outcome of that action and why, and be very cautious when purchasing or attempting to foreclose on a loan with an aged default date.
For questions about these rulings and how they may impact your foreclosure matters, please contact:
Jason D. Silver
Partner, Real Estate Division
Kelley Kronenberg- New York City, NY. – West Palm Beach, FL.
(845) 306-7867
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