Brian Rich, partner, was featured in the New York Law Journal article “NY Top Court Punts Certified Foreclosure Question Back to 2nd Circuit.” The article discusses the New York Court of Appeals’ decision to defer a certified question about the state’s Foreclosure Abuse Prevention Act (FAPA) to the Second Circuit. The case revolves around how FAPA is interpreted, particularly concerning loan acceleration and the statute of limitations. The court’s decision could significantly impact foreclosure cases in New York, given the complexities around determining when the statute of limitations begins for mortgage lenders.
Brian, who represents clients from the mortgage servicing industry, provided insights into the implications of the Court of Appeals’ decision, emphasizing that it leaves unresolved critical issues about the timing of loan acceleration. According to Brian, this ambiguity could potentially extend or limit the statute of limitations, which impacts lenders’ foreclosure processes. He noted that lenders and servicers need clear guidance to navigate ongoing foreclosure litigations effectively.
Additionally, Brian expressed concern over the practical effects of this decision on the mortgage industry. “In my mind,” Brian said of the Court of Appeals declining to weigh in, “it’s a disincentive to discontinue a foreclosure action under these circumstances, because you don’t exactly know what effect that might have on a later claim of default in terms of this acceleration issue. The law is so unsettled in this area right now.”
Brian advocated for judicial clarification to stabilize the mortgage market and reduce ambiguity in foreclosure practices, underscoring the potential economic impacts if lenders lack clear parameters on loan acceleration and limitations periods.
New York Law Journal subscribers can read the full article here.