Foreclosure Abuse Prevention Act
Article 13 LLC v. LaSalle National Bank Association
Date: Aug. 26, 2025
Issue: Whether the New York Foreclosure Abuse Protection Act (FAPA) is constitutional.
Case Summary: ABA filed a coalition amicus brief urging the New York Court of Appeals to hold that FAPA does not apply to foreclosure actions commenced before its enactment, or, in the alternative, if retroactive application is intended, such application is unconstitutional.
Article 13 sued LaSalle National Bank Association to cancel a consolidated mortgage loan. In 2007, LaSalle’s servicer, Central Mortgage Company (CMC), accelerated the debt by filing foreclosure. Article 13 argued that acceleration triggered the statute of limitations, which expired before LaSalle’s foreclosure attempt.
On Dec. 28, 2022, the district court denied summary judgment, citing uncertainty over whether CMC held the note. Two days later, Governor Hochul signed FAPA, fixing a six-year statute of limitations once a lender accelerates. Article 13 sought reconsideration, and in August 2023, the court granted it summary judgment, ruling FAPA was a retroactive and constitutional change in law. LaSalle appealed, and the Second Circuit certified to the New York Court of Appeals whether Section 7 of FAPA applies to pre-enactment cases and whether retroactive application violates due process.
In its brief, ABA argued that FAPA disrupted longstanding practices under New York mortgage law. It warned that the statute narrows the rule against unauthorized acceleration, estops mortgagees from relief even when third parties harm liens, and strips lenders of their long-recognized right to revoke acceleration through voluntary discontinuance. ABA added that New York’s lengthy foreclosure process already protects borrowers, underscoring why retroactive application is inappropriate.
ABA also argued that retroactive application of FAPA undermines the mortgage market. By depriving lenders of contractual rights that existed when their mortgages were originated, the statute destabilizes the secondary mortgage market and aggravates liquidity concerns, particularly for smaller banks. Retroactivity also discourages investment in New York, as lenders cannot rely on the legal framework in place at the time of origination. Borrowers may be harmed as well, because lenders fearing the statute of limitations will avoid extended negotiations and instead move quickly to foreclose, raising costs and increasing foreclosure risk, contrary to FAPA’s stated purpose.
Finally, ABA argued that retroactive application of FAPA is unconstitutional because it violates due process and the federal Contract Clause. ABA explained that FAPA substantially impairs mortgage contracts and does not represent a reasonable or appropriate way to achieve its stated purpose. ABA also stressed that retroactive application violates the New York Constitution’s Takings Clause, which bars the state from taking private property for public use without just compensation.
Bottom Line: On July 1, 2025, ABA also filed a coalition amicus brief urging the U.S. Supreme Court to examine whether the retroactive application of FAPA is unconstitutional in U.S. Bank v. Fox.
Document: Brief
