A law that was signed this past December by Governor Kathy Hochul of New York is set to make it significantly harder for mortgage lenders to foreclose on people who have fallen behind on their mortgage payments. This bill, the Foreclosure Abuse Prevention Act, is meant to address a number of recent court decisions that have given lenders greater leeway on New York’s six-year statute of limitations for pursuing foreclosure, as well as other legal issues that could present legal difficulties to borrowers. With this law, borrowers know they will not be suddenly subjected to foreclosure based on old unpaid bills or old foreclosure actions without cause.

What is the Foreclosure Abuse Prevention Act?

The Foreclosure Abuse Prevention Act, or FAPA for short, is a law that was originally passed in May 2022, but not signed until the end of December. The law was a response to a New York Court of Appeals decision, Freedom Mortg. Corp. v Engel, 37 N.Y.3d 1, reargument denied, 37 N.Y.3d 926 (2021), which seemingly gave lenders the right to unilaterally restart foreclosure proceedings. It also allowed lenders to avoid the statute of limitations on foreclosures, which is meant to be six years under New York State law.

What Does the Foreclosure Abuse Prevention Act Do?

The Foreclosure Abuse Prevention Act is meant to reinforce the statute of limitations by limiting the ability of lenders to toll the statute, or restart old proceedings without court approval. This includes a number of reforms to procedural law, most notably a change to the “saving statute” that limits the ability of lenders to restart foreclosure proceedings that were involuntarily dismissed. It also includes a change that prevents lenders from tolling the statute of limitations through unilateral action, such as by discontinuing and restarting foreclosure proceedings.

How Does the Foreclosure Abuse Prevention Act Help?

This new law can help by giving borrowers more security in the knowledge that they will not face foreclosure based on old debts or old foreclosure proceedings. Lenders who might otherwise have abused the law to restart old proceedings, or bring new ones based on old debts, now will have more hurdles to clear before they can try foreclosing on people. In this way, borrowers need to worry less about suddenly facing the risk of losing their home.

What Should You Do if You Are Foreclosed On?

If you are facing foreclosure, you may have a number of legal defenses open to you to help address your situation. However, to know what options you have available, you should speak to a lawyer with experience handling foreclosure cases. They can go over your legal strategy with you, and help you to get the best possible outcome for your situation.

At David J. Lorber & Associates, PLLC, we assist clients throughout New York who are at risk of losing their homes to foreclosure. We will explain your options and guide you in making the best decision for your circumstances. Call us at (631) 750-0900 or contact us online to schedule your Free consultation at our Setauket office.

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