Under FAPA, a foreclosure judgment is not “enforced” until the auction concludes: Second Department applies retroactivity and time-bars suit despite judgment of foreclosure and sale

Introduction

FV-I, Inc. v. Samuels (2025 NY Slip Op 04235) is a significant decision of the Appellate Division, Second Department, elaborating the scope and retroactivity of New York’s Foreclosure Abuse Prevention Act (FAPA), L 2022, ch 821. The court held that a judgment of foreclosure and sale (JFS) is not “enforced” merely because a notice of sale has issued or an auction has been scheduled; rather, enforcement is “generally deemed complete when the sale is concluded.” Because the foreclosure sale here had not occurred by FAPA’s effective date, FAPA applied retroactively, eliminating the lender’s ability to “undo” an earlier acceleration. The consequence: the 2017 foreclosure action was time-barred, the JFS was vacated, and the complaint dismissed.

Parties:

• Plaintiff-Respondent: FV-I, Inc. (successor to Wilmington Savings Fund Society, FSB), foreclosing plaintiff.
• Appellant-Defendant: Dwayne A. Samuels, borrower/homeowner.
• Nonparty-Respondent: Wilmington Savings Fund Society, FSB (predecessor plaintiff).

Key issues:

• Does FAPA apply to a case where a JFS was entered before FAPA’s effective date but the sale had not yet occurred?
• Is the issuance of a notice of sale sufficient to deem the JFS “enforced” for purposes of FAPA’s retroactivity clause?
• Given FAPA’s prohibition on unilateral de-acceleration, was the 2017 foreclosure action time-barred by a 2011 acceleration?
• Were constitutional challenges to FAPA preserved?

Summary of the Judgment

The Second Department reversed the Supreme Court’s order, granted the borrower’s motion to vacate the JFS, and dismissed the foreclosure complaint as time-barred. The court held:

• FAPA applies retroactively to actions in which a JFS “has not been enforced” as of December 30, 2022 (its effective date).
• Issuing a notice of sale is not “enforcement” of a JFS; enforcement is generally complete only when the auction sale concludes.
• The prior 2011 foreclosure action accelerated the debt; because the 2017 action was commenced more than six years later, it is time-barred under CPLR 213(4), and FAPA bars any unilateral de-acceleration that could otherwise rescue timeliness.
• Plaintiff’s constitutional objections to FAPA’s retroactive application were unpreserved because they were not raised in the Supreme Court.

Case Background and Procedural Timeline

• 2007: Samuels executed a $564,000 note to EquiFirst, secured by a mortgage on property in Elmont, NY.
• Default: Alleged nonpayment beginning June 1, 2009.
• March 2011: Bank of New York Mellon Trust Co., N.A. (BNYM), as successor, commenced a foreclosure action (the “prior action”), electing to call the entire debt due—thus accelerating the loan.
• 2015: The prior action was marked “PURGED NO ACTIVITY, PRE NOTE.” Plaintiff later characterized the prior action as abandoned.
• 2017: Wilmington (BNYM’s successor) commenced the present foreclosure action. FV-I, Inc. later became successor-plaintiff.
• 2018: Supreme Court granted Wilmington summary judgment and an order of reference.
• October 27, 2022: Judgment of foreclosure and sale entered.
• December 30, 2022: FAPA enacted, effective immediately.
• April 2023: Notice of sale issued for a June 14, 2023 auction. Before the sale, the court stayed the auction.
• Borrower moved to vacate the JFS and dismiss as time-barred, invoking FAPA. Supreme Court denied the motion. The Second Department reversed.

Analysis

Precedents Cited and Their Influence

The court’s reasoning rests on a coherent set of authorities governing acceleration, limitations, FAPA’s reforms, and the meaning of “enforcement” of a JFS:

• Statute of limitations and acceleration:
  • CPLR 213(4): A six-year statute of limitations applies to mortgage foreclosure actions.
  • Sarkar v Deutsche Bank Trust Co. Americas, 225 AD3d 641, 643; Collins v Bank of N.Y. Mellon, 227 AD3d 948, 950: Acceleration occurs when a foreclosure complaint seeks the full balance, starting the six-year period for the entire debt.
  • Bank of N.Y. Mellon v Norton, 219 AD3d 680, 682; U.S. Bank, N.A. v Jarrett, 233 AD3d 731; Wells Fargo Bank, N.A. v Brandt, 230 AD3d 623, 625: Applying acceleration principles to determine time-bar and evidentiary burdens.
• Pre-FAPA de-acceleration and FAPA’s changes:
  • Freedom Mtge. Corp. v Engel, 37 NY3d 1, 32, and progeny (Pennymac Corp. v Holcomb, 198 AD3d 978; U.S. Bank Trust, N.A. v Mohammed, 197 AD3d 1205): Before FAPA, lenders could revoke acceleration by clear affirmative acts, including voluntary discontinuance.
  • L 2022, ch 821; CPLR 203(h); CPLR 3217(e); Bank of N.Y. Mellon v Stewart, 216 AD3d 720, 722–723: FAPA abrogated Engel’s unilateral de-acceleration doctrine for foreclosure cases.
• Retroactivity and scope of FAPA:
  • Wells Fargo Bank, N.A. v Edwards, 231 AD3d 1189, 1193; Genovese v Nationstar Mtge. LLC, 223 AD3d 37, 44; U.S. Bank N.A. v Lynch, 233 AD3d 113: FAPA took effect immediately and applies to all actions on instruments under CPLR 213(4) where a JFS “has not been enforced.” Although not labeled as “retroactive,” the Legislature “clearly indicated” retroactive reach.
• What constitutes “enforcement” of a JFS:
  • Wilmington Sav. Fund Socy., FSB v Thomas, 226 AD3d 1064, 1067; Guardian Loan Co. v Early, 47 NY2d 515, 518–520; Nutt v Cuming, 155 NY 309, 313: Enforcement of a JFS is generally complete when the auction sale is concluded; preliminary steps like issuing a notice of sale are not completion of enforcement.
• Preservation of constitutional challenges:
  • Wilson v Bergon Constr. Corp., 219 AD3d 1380, 1383; HSBC Bank USA, N.A. v Jessup, 194 AD3d 1026, 1027: A party must raise constitutional arguments in the trial court; arguments not raised below cannot be asserted for the first time on appeal. The decision acknowledges Wilmington Trust, N.A. v Farkas, 232 AD3d 524, 526–527 and Matter of Novara v Cantor Fitzgerald, LP, 20 AD3d 103, 107–108, but deems plaintiff’s constitutional claims unpreserved.

These authorities, read together, compel the result: (1) the debt was accelerated in 2011; (2) unilateral de-acceleration is no longer available under FAPA; (3) the six-year period expired in March 2017; (4) the 2017 action, commenced in April, was untimely; and (5) FAPA applies because the JFS was not “enforced” by the mere issuance of a notice of sale.

Legal Reasoning

1. FAPA applies to pending cases with unenforced JFS:

   The Legislature provided that FAPA “took effect immediately,” applying to “all actions commenced on an instrument described under [CPLR 213(4)] in which a final judgment of foreclosure and sale has not been enforced.” The Second Department emphasized that, even without an explicit retroactivity clause, legislative text unmistakably contemplates retroactive application to such pending cases. Because no auction had yet occurred when FAPA took effect (Dec. 30, 2022), the JFS here had not been “enforced,” triggering FAPA’s application.

2. “Enforcement” requires a concluded sale:

   Relying on long-standing authority and recent appellate precedent, the court reiterated that enforcement of a JFS is “generally deemed complete when the sale is concluded.” The lender’s issuance of a notice of sale in April 2023 did not amount to enforcement; a scheduled auction is not the same as a concluded auction.

3. Acceleration in 2011 started the six-year clock:

   The court found that BNYM’s 2011 foreclosure complaint accelerated the debt by calling the entire balance due. That acceleration started the six-year limitation period on the entire debt under CPLR 213(4). Any argument that the prior action’s “purged” docket notation or abandonment undid acceleration fails under FAPA, which bars relying on unilateral acts to revoke acceleration.

4. FAPA eliminates unilateral de-acceleration:

   Before FAPA, lenders could rely on Engel to revoke acceleration by a clear de-acceleration letter or voluntary discontinuance. FAPA, through CPLR 203(h) and 3217(e), has displaced that doctrine in foreclosure cases. Hence, the 2011 acceleration remained effective for limitations purposes.

5. The 2017 action is time-barred:

   Six years from March 2011 expired in March 2017. Commencing the new action in April 2017 was outside the limitations period. The borrower made a prima facie showing of untimeliness; the plaintiff failed to raise a triable fact issue (e.g., through a recognized toll or different accrual date). As a result, the complaint had to be dismissed and the JFS vacated.

6. Constitutional objections were unpreserved:

   The court noted that because FAPA went into effect while the parties were litigating relevant issues in Supreme Court, plaintiff had a fair opportunity to raise constitutional arguments and did not. Those arguments were therefore not reviewable on appeal.

Impact and Practical Implications

FV-I, Inc. v. Samuels has immediate and far-reaching consequences for foreclosure practice in New York:

• Clarified “enforcement” threshold under FAPA:

  The decision cements that “enforcement” of a JFS hinges on the conclusion of the auction. Notices of sale and scheduled auctions do not suffice. This is a practical, bright-line rule, echoing Wilmington Sav. Fund Socy., FSB v Thomas and older Court of Appeals authority.

• Retroactive sweep of FAPA:

  Many cases with JFS entered before December 30, 2022, but without a concluded auction by that date, fall within FAPA’s ambit. If the debt was accelerated more than six years earlier and no valid toll or exception applies, defendants now have a potent limitations defense—even post-judgment.

• Engel’s unilateral de-acceleration is effectively off the table:

  Lenders can no longer rely on voluntary discontinuance or de-acceleration letters to reset the limitations period. Strategy must pivot to developing and proving permissible tolls (e.g., bankruptcy stays, written acknowledgments of debt that comply with GOL § 17-101, partial payments properly allocable, or statutory tolls) and ensuring accurate acceleration chronology.

• Preservation matters:

  Constitutional challenges to FAPA—Contract Clause, Due Process, or otherwise—must be raised in the trial court. Failure to preserve bars review on appeal in the ordinary course.

• Litigation posture for both sides:
  • Borrowers: Audit the timeline for prior accelerations. If a prior foreclosure occurred more than six years before the current action, consider moving to vacate any JFS and dismiss as time-barred under FAPA (provided the sale had not concluded by 12/30/22).
  • Lenders/servicers: Diligently evaluate acceleration dates, identify legitimate tolling events, and prepare to prove them. Where appropriate, expedite auctions to conclusion; a pending sale does not count as enforcement.

Complex Concepts Simplified

• Acceleration:

  When a lender “accelerates,” it demands immediate payment of the entire loan balance, not just missed installments. Filing a foreclosure complaint seeking the full amount due typically counts as an acceleration. From that point, the six-year statute of limitations runs on the entire debt.

• De-acceleration:

  Before FAPA, a lender could revoke acceleration by a clear act (e.g., a de-acceleration letter or voluntarily discontinuing a foreclosure), thereby stopping and effectively resetting the limitations period. FAPA now forbids relying on such unilateral acts in foreclosure cases.

• Foreclosure Abuse Prevention Act (FAPA):

  Enacted in 2022, FAPA’s core aim is to prevent manipulation of the statute of limitations in mortgage cases. Among other things, it:

  • Prohibits unilateral de-acceleration from reviving or extending the limitations period (see CPLR 203[h]; 3217[e]).
  • Applies immediately to cases where a JFS “has not been enforced” as of 12/30/22.
• Enforcement of a Judgment of Foreclosure and Sale:

  “Enforcement” is not achieved by issuing a notice of sale or scheduling a sale. It is “generally deemed complete” only when the foreclosure auction has concluded (i.e., when the property is sold at the auction).

• “Purged—No Activity” v. Discontinuance:

  A docket notation that a case was “purged” for inactivity is not necessarily a formal discontinuance. In any event, under FAPA, even a voluntary discontinuance would not undo the prior acceleration for limitations purposes.

• RPAPL 1301(3) (Election of Remedies):

  This statute restricts bringing multiple actions on the same mortgage debt. The Appellate Division did not need to reach this issue because it dismissed the case as time-barred under FAPA.

• Preservation of Constitutional Challenges:

  To argue that a statute is unconstitutional, parties must raise those arguments in the trial court. New constitutional arguments generally cannot be raised for the first time on appeal.

Key Takeaways

• FAPA applies retroactively to foreclosure actions where the JFS had not been “enforced” (sale concluded) by December 30, 2022.
• A notice of sale or scheduled auction does not constitute enforcement of a JFS; enforcement generally requires a concluded sale.
• Acceleration occurs upon filing a foreclosure complaint that demands the full balance, thus beginning the six-year limitations period under CPLR 213(4).
• After FAPA, lenders cannot unilaterally de-accelerate to reset the limitations period.
• If a foreclosure action is commenced more than six years after an earlier acceleration, it is time-barred absent a valid toll or exception—and even a previously entered JFS can be vacated on that basis.
• Constitutional challenges to FAPA must be preserved at the trial level.

Conclusion

FV-I, Inc. v. Samuels reinforces and clarifies the recalibrated foreclosure landscape under FAPA. The Second Department’s holding that “enforcement” of a JFS requires a concluded sale provides a clear, administrable rule for courts and practitioners and confirms FAPA’s sweeping retroactive reach to pending cases that had not progressed to a completed auction by December 30, 2022. The decision underscores that the acceleration clock starts when a lender sues for the full balance and that, post-FAPA, lenders cannot rely on unilateral acts to unwind that acceleration. The ruling thus fortifies the statute of limitations as a meaningful constraint in foreclosure litigation and offers borrowers a robust defense where acceleration predates suit by more than six years. At the same time, it signals to lenders the necessity of careful timeline management, preservation of constitutional arguments, and reliance on legitimate tolling doctrines rather than procedural maneuvers.