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APPELLATE DIVISION SECOND DEPARTMENT GRANTED APPEAL BY RONALD D. WEISS, PC AND DISMISSED FORECLOSURE ACTION AS TIME-BARRED BASED UPON THE FORECLOSURE ABUSE PREVENTION ACT AND THE STATUTE OF LIMITATIONS
On July 23, 2025, the Appellate Division, Second Department, reversed the Order of Hon. David P. Sullivan of the Nassau County Supreme Court in the foreclosure action entitled FV-1, etc, v. Samuels, Docket No 2023-11698, which denied the defendants motion filed by Ronald D. Weiss, PC seeking the vacatur of the Judgment of Foreclosure and Sale and the Dismissal of the 2017 foreclosure action as it was barred pursuant to the Foreclosure Abuse Prevention Act (FAPA) and the Statute of Limitations.
In this case, the Plaintiff’s predecessor in interest commenced a foreclosure action on March 2, 2011 to foreclose on the exact same loan secured on the subject premises in Elmont, NY and thereby accelerated the loan. A second foreclosure action was commenced by the Plaintiff on April 27, 2017, which was more than 6 years after the acceleration of the subject loan. Counsel for the Defendant argued that the 2017 action was barred by the applicable Statute of Limitations and was barred by FAPA.
On December 30, 2022 the NYS Governor signed the Foreclosure Abuse and Prevention Act. (hereinafter referred to as “FAPA”). The FAPA Senate bill made very clear in the section of the bill called “Purpose and Intent of Bill” that their intent was to correct what were defined as “abuses of the judicial foreclosure process” where foreclosure plaintiffs and the courts through misinterpretation have engaged in judicial overreach leading to an easily manipulated and controlled foreclosure statute of limitations. The bill starts out stating: “The Legislature finds that there is an ongoing problem with abuses of the judicial foreclosure process; that the problem has been exacerbated by court decisions which, contrary to the intent of the Legislature, have given mortgage lenders and loan services opportunities to avoid strict compliance with remedial statutes and manipulate statutes of limitation to their advantage.”
An action to foreclose a mortgage is governed by a six-year statute of limitations. CPLR § 213(4).
“When a mortgage is payable in installments . . . an acceleration of the entire amount due begins the running of the statute of limitations on the entire debt. See Milone v. U.S. Bank N.A., 164 A.D.3d 145, 83 N.Y.S.3d 524 (2d Dept. 2018). A primary form of acceleration, and the method used in this case, exists when a creditor commences an action to foreclose upon a note and mortgage and seeks, in the complaint, payment of the full balance due. Id. at 152, 529.
Moreover, In EMC Mtge. Corp. v. Patella, 279 A.D.2d 604, 720 N.Y.S.2d 161 (2d Dept. 2001), the court noted that, “[t]he law is well settled that, even if a mortgage is payable in installments, once a mortgage debt is accelerated, the entire amount is due and the statute of limitations begins to run on the entire debt,” citing, Rols Capital Co. v. Beeten, 264 A.D.2d 724, 696 N.Y.S.2d 48 (2d Dept. 1999); Loiacono v. Goldberg, 240 A.D.2d 476, 658 N.Y.S.2d 138 (2d Dept. 1997). The court further notes in EMC Mtge. Corp. v. Patella, “as this court stated in Federal Natl. Mtge. Assn v. Mebane, 208.A.D.2d 892, 618 N.Y.S.2d 88 (2d Dept. 1994), once a mortgage debt is accelerated, ‘the borrowers’ right and obligation to make monthly installments ceased and all sums [become] immediately due and payable’, and the six-year statute of limitations begins to run on the entire mortgage debt.” Patella, 279 A.D.2d at 605.
The Foreclosure Abuse Prevention Act was designed to prevent the abusive conduct that has taken place in this case. The Defendant has been forced to defend foreclosure actions for the past 12 years and has experienced constant stress due to the fear of losing his family home because of the pendency of two foreclosure actions by the Plaintiff and/or its predecessors in interest.
FAPA state in §10 that: “[t]his act shall take effect immediately and shall apply to all actions commenced on an instrument described under subdivision four of section two hundred thirteen of the civil practice law and rules in which a final judgment of foreclosure and sale has not been enforced.” (L2022, ch821, §10)
Judge Sullivan determined that FAPA did not apply to instant foreclosure action based upon the following rationale: “where Plaintiff has scheduled a foreclosure sale, even where same has not yet been conducted, the judgment has been deemed “enforced” and is thus beyond the reach of the retroactive application of FAPA.” In support of this ruling Judge Sullivan refers to the case U.S. Bank Trust, N.A. as Trustee for LB-Cabana Series IV Trust v. Leonardo, 79 Misc. 3d 1075 (Nassau County Sup. CT. 2023). The case cited for this authority is another Nassau County Supreme Court case that was also decided by Judge Sullivan
Defendant’s counsel argued in its Brief to the Appellate Court that the Judgment of Foreclosure ands Sale is not enforced until a foreclosure sale is actually conducted and it is not enforced by the Plaintiff-Respondent’s mere scheduling of a sale date. If we accept the second interpretation, the Plaintiff-Respondent and foreclosing parties in general could avoid the retroactive effect of FAPA by simply scheduling a foreclosure sale and subsequently cancelling the sale. This would defeat the entire Intent and Purpose of FAPA.
The FAPA senate bill made it very clear that the Purpose and Intent of the bill was to prevent manipulation of the Statute of Limitations by the mortgage lenders and loan servicers. At the outset the Senate bill provides that: “The Legislature finds that there is an ongoing problem with abuses of the judicial foreclosure process; that the problem has been exacerbated by court decisions which, contrary to the intent of the Legislature, have given mortgage lenders and loan servicers opportunities to avoid strict compliance with remedial statutes and manipulate statutes of limitation to their advantage.”
The Plaintiff contended that FAPA was not intended to have retroactive effect and, therefore the 2017 foreclosure action should not be dismissed. The Plaintiff’s predecessor in interest had attempted to discontinue the 2011 foreclosure action by filing a motion, which was denied by the Court.
Appellate Division ruled that “FAPA took effect ‘immediately’ applying ‘to all actions commenced on an instrument described under [CPLR 213(4)] in which a final judgment of foreclosure and sale has not been enforced’” (Wells Fargo Bank, N.A. v. Edwards, 231 AD3d 1189, 1193, quoting L2022, ch 821, §10). Therefore, “[a]lthough the Legislature did not explicitly state that FAPA should apply retroactively, it clearly indicated that it should’” (id., quoting Genovese v. Nationstar Mtge, LLC, 223bAD2d 37, 44; see U.S. Bank N.A. v. Lynch, 233 AD3d 113).
The Appellate Court held that “enforcement of a judgment of foreclosure and sale is generally deemed complete when the sale is concludeds” (Wilmington Sav. Fund Socy., FSB v. Thomas, 226 AD3d 1064, 1067; see Guardian Loan Co. v. Early, 47 NY2d 515, 518-520; Nutt v. Cuming, 155 NY 309, 313). As the foreclosure sale had not taken place in the instant case FAPA applied and the 2017 action was commenced more than 6 years after the . loan was accelerated
Based upon the foregoing, the Appellate Court ruled that the Supreme Court should have granted those branches of the defendant’s motion which were to vacate the judgment of foreclosure and sale and dismiss the complaint insofar as asserted against him as time-barred.
