The dismissal was over a missed borrower notice - and that detail decided everything
A missed borrower notice sank a foreclosure once. It did not sink it for good.
On August 5, 2026, New York's Appellate Division, Second Department, ruled that Federal National Mortgage Association (Fannie Mae) could keep pursuing a refiled foreclosure against a Babylon homeowner - even under the state's Foreclosure Abuse Prevention Act or FAPA, the 2022 law that created a foreclosure-specific timing statute.
The borrower signed a note in 2006, secured by a mortgage on a Babylon property. Fannie Mae moved to foreclose in 2015. That case collapsed in December 2018, when a court dismissed it for failing to meet Real Property Actions and Proceedings Law or RPAPL 1304 - the rule that a lender must mail the borrower a pre-foreclosure notice before filing.
The lender did not walk away. It asked the court to vacate the dismissal, lost again in May 2022, filed a late appeal, and saw that appeal dismissed by December 2022. Meanwhile, on November 10, 2022, Fannie Mae simply refiled. Service on the homeowner wrapped up a day later.
This time the borrower pushed to end the case on timing. She sought summary judgment - a decision without a trial - arguing the new foreclosure came too late. She also asked to cancel the mortgage under RPAPL 1501(4), which lets a homeowner clear a mortgage once the foreclosure clock expires, and added a good-faith counterclaim and a bid for attorneys' fees. A Suffolk County judge denied those requests in May 2024. She appealed.
The panel affirmed, leaving the borrower's motion denied and the foreclosure in place.
New York gives a lender that files on time a six-month cushion to refile if the first case ends for a reason unrelated to the merits. That cushion lives in CPLR 205(a) and, for foreclosures, in CPLR 205-a - the provision the Foreclosure Abuse Prevention Act put on the books. It disappears if the first case was decided on the merits.
The court drew a sharp line. A dismissal for missing the RPAPL 1304 notice is not a ruling on the merits, the judges held - it is a failure to clear a condition the law sets before a lender can sue. That kept the window open.
The timing argument failed for a second reason. The 2018 dismissal came on the lender's default, and default orders cannot be appealed. So the first case did not end until June 21, 2022, and the November refiling fell inside the window.
For lenders and servicers, the takeaway is practical. A fumbled notice can cost a case. It need not cost the loan.
