Practical Applications of Foreclosure Abuse and Prevention Act

July 31, 2026 By Elliot S. Schlissel

The Foreclosure Abuse Prevention Act (“FAPA”) deals with a common practice of financial institutions in the past. Financial institutions would start foreclosure lawsuits and then when it was in their advantage they would discontinue or stop the lawsuit. However, under the new statute when a financial institution starts a foreclosure lawsuit they can no longer voluntarily stop it by discontinuing the lawsuit.

Inappropriate Litigation Conducted by Banks

Financial institutions have in the past engaged in inappropriate litigation conduct. FAPA was designed to prevent financial institutions from starting foreclosure lawsuits and then deciding they did not want to move forward for a strategic reason and discontinuing the case.

The 6 Year Statute of Limitations

Financial institutions sought to get around the 6 year Statute of Limitations. In the State of New York a mortgage foreclosure lawsuit must be initiated within 6 years of either the date of maturity of the loan, the date the loan is accelerated or the date a foreclosure lawsuit is filed. Under FAPA if a financial institution voluntarily stops a lawsuit moving forward by filing a discontinuance, it does not reset the Statute of Limitations. The Statute of Limitations of 6 years runs under this new Statute, it runs from the initial filing of the foreclosure. If a subsequent or second foreclosure is brought more than 6 years from the prior one, it can be dismissed.

Legislative Intent of New York Foreclosure Abuse Prevention Act (“FAPA”)

The New York Foreclosure Abuse Prevention Act (‘FAPA”) applies retroactively. This means law applies to foreclosure cases that have been initiated prior to FAPA being past in the end of 2022.

FAPA Held to be Valid by New York’s Highest Court

The New York State Court of Appeals, the State’s highest Court has confirmed in more than one case that FAPA applies retroactively to pending foreclosure actions. These cases in the New York State Court of Appeals affirmed that FAPA does not violate the New York State Constitution, due process or other contractual clauses. In these cases the highest court rejected arguments that the retroactive nature of the Statute violates due process or Federal Contract Rights. The Statute prevents lenders from unilaterally stopping or revoking their prior acceleration of a loan for the sole purpose of resetting the 6 year Statute of Limitations. As a result of these cases, thousands of old pending foreclosures were now capable of being dismissed.

The law firm of Schlissel DeCorpo LLP has been helping families deal with mortgage and foreclosure problems for more than 30 years. We can be reached at 718-350-2802, 516-561-6645 or 631-319-8262 or by e-mail at info@sdnylaw.com.