While many around the world are setting their calendars forward for the year 2023, residential mortgage loan owners and servicers may need to also look backward in time now that New York Governor Kathy Hochul signed the so-called “Foreclosure Abuse Prevention Act” (S5473) into law on December 30, 2022. The new law, which takes effect immediately, threatens to significantly constrain the ability of lenders, servicers and investors to efficiently prosecute foreclosure actions and potentially jeopardizes their ability to recover their mortgage debt with respect to not only foreclosures initiated after the law took effect but also foreclosure actions which were pending as of December 30.

We previously addressed the background and events leading up to the introduction and passage of S5473 by the New York legislature in detail. Because the legislation remained unchanged from the time the legislature passed the bill to the time Governor Hochul signed the measure into law, we do not rehash all of the law’s provisions in this Legal Update. Key provisions of the new law that mortgage industry participants should be aware of are:

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