The legal and constitutional implications of New York’s Foreclosure Abuse Prevention Act (FAPA) are back in the spotlight as the U.S. Court of Appeals for the Second Circuit again turns to the New York Court of Appeals for guidance. In Article 13 LLC v. Ponce De Leon Federal Bank, 132 F.4th 586 (2d Cir. 2025), the Second Circuit certified two key questions regarding the scope and retroactive application of FAPA — a statute that has significantly altered the foreclosure litigation landscape in New York.

Background

The dispute in Article 13 LLC began with a 2020 action filed in the Eastern District of New York, in which the plaintiff sought to discharge a mortgage arguing the statute of limitations had expired. The basis for the claim was a prior foreclosure action initiated in 2007, which the plaintiff argued had accelerated the mortgage debt. However, the district court denied cross-motions for summary judgment, finding a factual issue as to whether the foreclosing party in 2007 had standing to accelerate the debt.

Just two days after the court issued its ruling, the New York State Legislature enacted FAPA. Section 7 of FAPA, codified at CPLR 213(4)(b), prohibits defendant mortgagors from arguing that a mortgage was not properly accelerated unless a prior foreclosure was dismissed explicitly on that ground. Section 10 makes FAPA applicable to all actions in which a final judgment of foreclosure and sale has not yet been enforced.

Following the law’s enactment, the plaintiff moved for reconsideration arguing that FAPA was an intervening change in controlling law. The district court agreed, applied FAPA retroactively, and granted summary judgment in the plaintiff’s favor. The defendant appealed.

Certified Questions

On appeal, the defendant challenged the constitutionality of FAPA’s retroactive application, citing due process concerns under both the U.S. and New York constitutions.

On March 25, 2025, the Second Circuit certified two questions to the New York Court of Appeals:

1. Whether, and to what extent, Section 7 of FAPA applies to foreclosure actions commenced prior to the statute’s enactment; and

2. Whether FAPA’s retroactive application violates the right to substantive or procedural due process under the New York constitution.

As of this writing, the New York Court of Appeals has not indicated whether it will accept the Second Circuit’s latest certification request. This is now the second time in five months the federal appeals court has sought the state high court’s input. In East Fork Funding, LLC, the Court of Appeals declined to address a separate FAPA issue involving unilateral discontinuances.

Lower Court Landscape

Despite the uncertainty at the Court of Appeals, intermediate appellate courts in New York have largely upheld the retroactive application of FAPA. Recent decisions from the First, Second, and Third Departments have rejected constitutional challenges to the statute.

Industry Implications

FAPA has already had a significant impact on foreclosure litigation strategy and mortgage servicing operations in New York. Its broad retroactivity provisions — if ultimately upheld by the Court of Appeals — could undermine longstanding defenses based on statute-of-limitations grounds, complicating risk assessments for servicers and investors alike.

As stakeholders await further clarification from New York’s highest court, the Article 13 LLC case presents another opportunity for the judiciary to resolve lingering questions about FAPA’s reach and constitutionality.

We will continue to monitor developments closely and provide updates should the Court of Appeals decide to weigh in on the certified questions.