Mark Anderson, Partner and Matthew Routh, Senior Associate, applied New York’s Foreclosure Abuse Prevention Act (“FAPA”) to a recent case.
The Foreclosure Prevention Act, signed by Governor Kathy Hochul, aims to prevent banks from exploiting voluntary discontinuances to their benefit. In essence, once a plaintiff has started a foreclosure action, they cannot intentionally stop the process by taking affirmative steps, such as discontinuing a previous foreclosure action.
In 2008, the Defendant Citigroup Global Markets Realty Corp. commenced a foreclosure action to accelerate the mortgage on the property. The Court later denied an application to appoint a referee because the Defendant failed to demonstrate it owned the mortgage and note. Citigroup voluntarily moved to discontinue the action in 2012.
The Plaintiff commenced the action to quiet title of the property in 2016. A quiet title action is a legal proceeding used to resolve disputes and establish clear ownership of property, whether it’s a home, commercial building, or land. In 2017, the action was dismissed “holding that the acceleration of the mortgage by commencing the foreclosure action was a nullity.”
Mark and Matt filed motions to apply FAPA to the case, the court granted renewal of the action. The court noted that pursuant to FAPA, the prior discontinuance without consent from the borrower did not de-accelerate the mortgage and did not restart the statute of limitations.
Mark Anderson, Partner and Matthew Routh, Senior Associate, applied New York’s Foreclosure Abuse Prevention Act (“FAPA”) to a recent case.
In 2008, the Defendant Citigroup Global Markets Realty Corp. commenced a foreclosure action to accelerate the mortgage on the property. The Court later denied an application to appoint a referee because the Defendant failed to demonstrate it owned the mortgage and note. Citigroup voluntarily moved to discontinue the action in 2012.
The Plaintiff commenced the action to quiet title of the property in 2016. A quiet title action is a legal proceeding used to resolve disputes and establish clear ownership of property, whether it’s a home, commercial building, or land. In 2017, the action was dismissed “holding that the acceleration of the mortgage by commencing the foreclosure action was a nullity.”
Mark and Matt filed motions to apply FAPA to the case, the court granted renewal of the action. The court noted that pursuant to FAPA, the prior discontinuance without consent from the borrower did not de-accelerate the mortgage and did not restart the statute of limitations.
The decision can be read below.