03/23/2025
Impacts of the Foreclosure Abuse Prevention Act
On December 30, 2022, Governor Kathy Hochul signed into law the Foreclosure Abuse Prevention Act (“FAPA”) (A7737B). Originally introduced by Senator James Sanders, Jr. on March 8, 2021, FAPA spent nearly two years moving through New York’s legislative process. The act was a direct response to the Court of Appeals decision in Freedom Mtge. Corp. v. Engel (37 NY3d 1 [2021]), leading many to refer to FAPA as the “Anti-Engel Bill.”
With FAPA’s passage, many mortgage liens have been rendered time-barred under New York’s six-year statute of limitations for mortgage foreclosures. This article examines the current state of New York foreclosure law and how FAPA has reshaped the legal landscape.
I. Understanding the Statute of Limitations in
A statute of limitations establishes a deadline for filing lawsuits after a triggering event. Under New York law (CPLR § 213[4]), the statute of limitations for mortgage foreclosure is six years. However, mortgage agreements often span 15–30 years, leading to confusion about how the statute of limitations applies to foreclosures.
The statute of limitations impacts mortgage foreclosures in two key ways:
1. Installment Contracts: A mortgage is an installment contract, meaning each missed payment constitutes a separate breach. If a borrower fails to make a payment on January 1, 2010, for example, the lender has until January 1, 2016, to file a foreclosure action based on that missed payment.
2. Acceleration of Debt: Mortgage agreements often grant lenders the right to accelerate the loan upon default. Acceleration makes the entire loan balance immediately due, triggering the six-year statute of limitations on the full amount. If the lender fails to file a foreclosure action within six years of acceleration, the mortgage debt becomes time-barred.
Read full article here:
https://www.ny-bankruptcy.com/impacts-of-the-foreclosure-abuse-prevention-act
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