Retroactive Application of FAPA Bars Late Foreclosure Actions: Clarifying Limitations and Finality in Mortgage Foreclosures

Introduction

This commentary examines the Third Department’s decision in Deutsche Bank Natl. Trust Co. v. Goldwasser (2025 NYSlipOp 01988), which addresses whether the Foreclosure Abuse Prevention Act (FAPA, L 2022, ch 821) may be applied retroactively to bar a second foreclosure action initiated more than six years after acceleration of the debt. The parties are Deutsche Bank National Trust Company (the indentured trustee and appellant) and Mark S. Goldwasser and Paula Goldwasser (the mortgagors and respondents). In 2006 the Goldwassers executed a secured note and mortgage. Deutsche Bank first sued to foreclose in 2012, won summary judgment but failed to enter a foreclosure judgment in time, and saw that action dismissed. In 2019 Deutsche Bank filed a second foreclosure action. The Goldwassers moved to renew their earlier motion for summary judgment and to dismiss on statute-of-limitations grounds under FAPA; the trial court granted relief, vacated the foreclosure judgment and dismissed the complaint. Deutsche Bank appealed.

Summary of the Judgment

On appeal, the Third Department affirmed. It held:

The Goldwassers’ CPLR 2221(e) motion to renew was timely despite the expiration of the appeal period, because FAPA’s express retroactive scope constitutes a legislative exception.
Retroactive application of FAPA did not violate due process, as the Act is remedial, rationally related to finality and homeowner protection, and validly overruled prior judicial misinterpretations.
FAPA does not violate the Contracts Clause; it clarifies and does not substantially impair contractual rights, and the Legislature had a significant public purpose in preventing abusive, perpetual foreclosure filings.
Under FAPA, a foreclosure action filed more than six years after acceleration is time-barred; the 2019 action came seven years after acceleration in 2012, so it was properly dismissed.

Analysis

Precedents Cited

Deutsche Bank Natl. Trust Co. v. Quinn, 217 AD3d 1157 (3d Dept 2023): Recognized that renewal motions based on changes in law must be made before final judgment or before appeal time expires.
Matter of Huie (Furman), 20 NY2d 568 (1967): Established the temporal limitation on renewal motions where appellate courts overrule existing law; legislative exceptions are permissible.
Freedom Mtge. Corp. v. Engel, 37 NY3d 1 (2021): Demonstrated past judicial misinterpretations allowing noteholders to toll or reset statutes of limitations unilaterally.
U.S. Bank N.A. v. Lynch, 233 AD3d 113 (3d Dept 2024): Validated FAPA’s retroactive application as due-process compliant and rationally related to legislative purpose.
Deutsche Bank Natl. Trust Co. v. Dagrin, 233 AD3d 1065 (2d Dept 2024): Confirmed that no contractual right exists for unilateral de-acceleration and supported FAPA’s clarifications.
General Motors Corp. v. Romein, 503 US 181 (1992) & Energy Reserves Group, Inc. v. Kansas Power & Light Co., 459 US 400 (1983): Established the Contracts Clause test for substantial impairment and significant public purpose.

Legal Reasoning

The court’s reasoning unfolds in three stages:

Timeliness of the Renewal Motion. Although CPLR 2221(e) lacks a statutory deadline, New York practice bars renewal motions after entry of final judgment or expiration of appeal time, absent legislative exception. FAPA’s text explicitly covers “all actions … in which a final judgment of foreclosure and sale has not been enforced,” carving out an exception that renders the 2023 motion timely.
Constitutional Challenges. The court rejected due-process and Contracts Clause attacks:
- Due process: FAPA’s immediate effective date and remedial purpose—to correct judicial misinterpretations and protect homeowners—are rational and non-arbitrary. Retroactivity was foreseeable.
- Contracts Clause: There is no substantial impairment of contractual rights, as the mortgage note did not grant a right to de-accelerate or reset limitations. FAPA simply defines how limitations run after acceleration, a public-purpose measure to foster finality and fairness in foreclosure practice.
Statute-of-Limitations Application. Under CPLR 213(4) and RPAPL 1301(3), a foreclosure action must be brought within six years of acceleration. Deutsche Bank accelerated in 2012; its 2019 filing therefore falls outside the period and is time-barred under FAPA.

Impact

This decision and FAPA will have significant consequences:

Clarification of limitations law: Lenders can no longer rely on split judicial authority to toll or reset foreclosure statutes of limitations by strategic filings or delays.
Finality for homeowners: Defendants face a single, time-limited exposure to foreclosure, reducing repeated litigation risk.
Streamlining foreclosure practice: Courts and practitioners now follow a uniform statutory framework that preempts divergent case law.
Guidance on renewal motions: The decision confirms that legislative retroactivity provisions may validate late renewal motions, shaping practice under CPLR 2221(e).

Complex Concepts Simplified

Acceleration: A lender’s declaration that the entire loan balance is due immediately, triggering the statute of limitations.
De-acceleration: A theoretical reversal of acceleration (not recognized here) that would restart the limitations period.
CPLR 2221(e) Motion to Renew: A post-judgment tool to present new facts or changes in law that could alter a court’s prior ruling.
Retroactivity vs. Prospective Application: Retroactive statutes apply to existing actions; here, FAPA’s text expressly reaches un-enforced foreclosure judgments.
Contracts Clause Test: A three-part inquiry: (1) existence of contractual rights, (2) substantial impairment by new law, and (3) legitimate public purpose justifying the law.

Conclusion

The Third Department’s decision in Deutsche Bank Natl. Trust Co. v. Goldwasser robustly upholds FAPA’s retroactive application to bar time-expired foreclosure actions, confirms the timeliness of renewal motions when legislative exceptions exist, and rebuffs constitutional challenges. By clarifying how the statute of limitations runs after acceleration and preventing repeated foreclosure filings, the court promotes finality, fairness, and predictability in New York mortgage foreclosure law. This ruling will guide lenders, homeowners, and courts in the post-FAPA era, ensuring statutory uniformity and mitigating abuse of the foreclosure process.