A 2007 acceleration and a 2022 law made the math impossible
Nationstar Mortgage just lost a nearly two-decade fight over a Queens property - and a 2022 state law made sure of it.
The Appellate Division, Second Department, affirmed on October 14 that Nationstar’s foreclosure action was time-barred. The ruling turned on the six-year statute of limitations and the Foreclosure Abuse Prevention Act, the 2022 law that has been reshaping how New York courts handle stale mortgage claims.
The timeline tells the story. In July 2007, Chase Home Finance - Nationstar’s predecessor in interest - filed a foreclosure action against the homeowner on a Queens property. That filing accelerated the full mortgage debt, starting the six-year clock.
Chase never followed through. In May 2013, the court dismissed the case as abandoned.
Nationstar picked up the thread in March 2020, filing a new foreclosure action on the same mortgage. The homeowner argued the claim was time-barred. More than six years had passed since the 2007 acceleration. The arithmetic was not complicated.
Nationstar’s counter: under the old savings provision, CPLR 205(a), a lender whose foreclosure was dismissed could refile within six months, even after the statute of limitations expired. Servicers had leaned on that workaround for years to revive dead claims.
FAPA closed that door. Taking effect in late December 2022, it replaced the old provision with CPLR 205-a, which specifically bars the six-month extension when a prior action was dismissed for neglect. Abandonment under CPLR 3215 qualifies.
Armed with the new law, the homeowner cross-moved to renew his earlier motion to dismiss, which had been denied in April 2022 - before FAPA existed. The Supreme Court in Queens granted the renewal, vacated its prior order, and threw out Nationstar’s case.
On appeal, Nationstar argued FAPA should not reach back to cover its claim and challenged the law’s constitutionality. The Second Department rejected both arguments, citing the Court of Appeals’ decisions - the two rulings that have become the go-to authority on FAPA retroactivity statewide. The court also granted the homeowner’s counterclaim to cancel and discharge the mortgage from the property’s record.
For servicers holding legacy New York loans with prior foreclosures dismissed for neglect or abandonment, the pattern is now well established. FAPA has shut the door, and constitutional challenges are failing across every appellate department.
