Just over a year has passed since the enactment of the New York Foreclosure Abuse Prevention Act (“FAPA”). FAPA was enacted as a response to the New York Court of Appeals’ 2021 holding in Freedom Mortg. Corp. v. Engel, 37 N.Y.3d 926 (2021), which affirmed the (then-existing) convention under which a lender could start foreclosure proceedings and subsequently discontinue them with a concomitant renewal of the six-year statute of limitations on foreclosure. FAPA’s immediate and retroactive effect was to bring into question the remedies available to lenders (or those to whom the loans had been sold) with respect to all loans in which a mortgage foreclosure action had been begun but for which a final judgement of foreclosure and sale had not been enforced. In the year since its enactment, we have seen a host of challenges to the law, on procedural and constitutional grounds, which we covered in our previous OnPoint. Many of these cases remain ongoing, either at the trial court level or in appellate proceedings. This OnPoint will focus on the present state of constitutional challenges to FAPA’s retroactive application brought in New York courts, as well as a brief review of their implications for securitizers of mortgage-backed bonds.

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