In a prior alert,1 we discussed significant uncertainty in New York State law pertaining to the statutes of limitations in mortgage foreclosure actions. That uncertainty was highlighted by the Second Circuit’s decision in East Fork Funding v. U.S. Bank, N.A.2 to certify certain questions related to the Foreclosure Abuse Prevention Act (FAPA) to the New York Court of Appeals (the state’s highest court) and whether it applied to time bar certain pre–FAPA cases.
Since then, the Court of Appeals declined certification, turning eyes away from Albany and back to Manhattan. The litigation of foreclosures has continued, with multiple appellate division cases addressing the constitutionality of several FAPA provisions. Meanwhile, industry observers—particularly foreclosing lenders—have waited for more clarity.
On March 25, 2025, the Second Circuit indicated that it also desires guidance,3 again asking the Court of Appeals to answer whether FAPA’s limitations provisions apply to pre–FAPA foreclosures and whether retroactive application violates the right to substantive and procedural due process under the Constitution of the State of New York. While the certification acknowledges the denial of the prior request and bases its latest request on different FAPA provisions, it nevertheless presents a sense of déjà vu for those following these issues.
In fact, this second request only underscores the complexity of the issues that the post–FAPA landscape presents. Until these are resolved, those with an interest in New York State’s mortgage market will continue to be left to guess as to what “value judgment and important public policy choices”4 the New York Court of Appeals ultimately makes, either in response to the certified questions or through direct appeals. Either way, attorneys at Barclay Damon remain cautiously optimistic that our next alert on this topic will provide some answers and, hopefully, will come sooner rather than later.
The Thought Leadership Committee of Barclay Damon’s Restructuring, Bankruptcy & Creditors’ Rights Practice Area issues alerts and blogs on an ongoing basis to keep clients, colleagues, and friends up to date on important developments in the insolvency space. If you have any questions regarding the content of this alert, please contact the author, Brian Rich, partner, at brich@barclaydamon.com; Janice Grubin or Jeff Dove, Restructuring, Bankruptcy & Creditors’ Rights Practices Area co-chairs, at jgrubin@barclaydamon.com and jdove@barclaydamon.com; or Robert Wonneberger, Thought Leadership Committee chair, at rwonneberger@barclaydamon.com.
1See also Law360, “Foreclosing Lenders Still Floating in Murky Legal Waters in NY,” available to subscribers.
2No. 23-659 (2d Cir. 2024).
3Article 13, LLC v. Ponce De Leon Federal Bank, et al., NO. 23-7247-S.
4See Article 13, LLC, p. 11.