As a result, many lenders later attempted to file new foreclosure actions against the same loans, arguing that prior cases did not properly trigger the statute of limitations because the wrong party filed the case or because the loan was not validly accelerated.
The Court of Appeal rejected these arguments, referring to language in the statute stating that the law “shall take effect immediately” and apply to all foreclosure actions without an enforced final judgment.
The court also said applying the law retroactively is constitutional, noting that lenders were responsible for the timing and handling of prior cases.
The rulings are expected to have significant implications for foreclosure lawsuits in New York, with homeowners now enjoying stronger protections against old or repeat foreclosure attempts.
For lenders, the ruling makes clear that the proper legal steps and documentation are required before moving forward with stalled or dismissed foreclosures.
“These decisions are a huge victory for New York homeowners, who have been besieged for too long by lenders seeking to manipulate the statute of limitations and revive foreclosure actions that have long been dismissed or abandoned,” said Jacob Inwald, director of economic justice litigation at Legal Services NYC.
“Governor Hochul and state lawmakers wisely closed the loophole that allowed lenders to refile time-barred foreclosure actions by passing the Foreclosure Abuse Prevention Act, and the Court of Appeals properly strengthened the law’s protections,” he added. “Struggling homeowners in New York can breathe a little easier knowing that their rights against time-barred foreclosure actions will be upheld.”
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