Appeals court orders Nationstar mortgage canceled under FAPA
The borrower sued in 2017 under RPAPL 1501(4), which lets property owners ask a court to strip a mortgage from the record once the limitations period has run. He moved for summary judgment against Nationstar.
The lower court denied that motion in June 2018, finding the discontinuance of the 2009 foreclosure action raised a triable question – had dropping the case revoked the acceleration and reset the clock? Before FAPA, that argument had real legs. Servicers routinely discontinued stale foreclosures and filed new ones, and New York courts were divided on whether it worked.
FAPA changed the equation. Effective December 30, 2022, it amended CPLR 203(h) to bar any party from unilaterally waiving, postponing, canceling, tolling, reviving, or resetting the accrual of a mortgage limitations period. A companion amendment to CPLR 3217(e) spelled out that voluntarily discontinuing a foreclosure action does not restart the clock.
The borrower moved to renew his earlier motion on this change in law. The lower court denied renewal as untimely. The Second Department disagreed – no final judgment had been entered or enforced, so the motion was timely.
On the merits, the court found the borrower showed the debt was accelerated in 2009, the six-year period expired in 2015, and any new foreclosure action would be time-barred. Nationstar challenged FAPA’s retroactive application and constitutionality. The court rejected both as “without merit,” citing Court of Appeals decisions and Article 13. The panel was unanimous.
