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PLAINTIFF DID NOT PROVE THE RPAPL 1304 NOTICE OF FORECLOSURE WAS PROPERTY MAILED TO DEFENDANT; THE MAILING WAS DONE BY A THIRD PARTY AND NO FIRST-HAND KNOWLEDGE OF THE THIRD-PARTY’S MAILING PROCEDURE WAS PRESENTED (FIRST DEPT). ​

The First Department, reversing Supreme Court, determined the plaintiff in this foreclosure action did not demonstrate the RPAPL 1304 notice of foreclosure was properly mailed to defendant. The mailing was done by a third-party and no first-hand evidence of that party’s mailing procedure was presented:

… [T]he affiant did not attest that she was familiar with the standard office mailing procedures of Covius Services, LLC, the third-party vendor that sent the RPAPL 1303 and 1304 notices on behalf of plaintiff. The affidavit therefore did not establish proof of a standard office mailing procedure designed to ensure that items were properly addressed and mailed … . The affidavit also did not address the nature of plaintiff’s relationship with Covius, nor did it address whether Covius’s records were incorporated into plaintiff’s own records or routinely relied upon in plaintiff’s business … . Thus, under the circumstances presented, the tracking numbers on the copies of the 90-day notices did not by themselves suffice to establish proper mailing under RPAPL 1304 … . Wells Fargo Bank, N.A. v Merino, 2026 NY Slip Op 02616, First Dept 4-28-26

Practice Point: If the mailing of the RPAPL 1304 notice of foreclosure is done by a third-party, first-hand knowledge of that party’s mailing procedure must be presented.​

 

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AFTER THE JUDGMENT OF FORECLOSURE AND THE EXPIRATION OF THE TIME FOR APPEAL, DEFENDANT, PRIOR TO THE SALE OF THE PROPERTY, PURSUANT TO CPLR 2221, MOVED TO VACATE THE JUDGMENT BASED ON THE FORECLOSURE ABUSE PREVENTION ACT (FAPA); THE MOTION SHOULD NOT HAVE BEEN DENIED AS UNTIMELY; MATTER REMITTED (FIRST DEPT).

The First Department, reversing Supreme Court, determined that defendant in this foreclosure action used the proper procedure for attempting to apply the Foreclosure Abuse Prevention Act (FAPA) retroactively. The foreclosure action had already proceeded to judgment and the time for appeal had expired. The only way to effectuate the FAPA at that point is a motion to renew (CPLR 2221) made before the sale of the property. Defendant’s CPLR 2221 motion should not have been denied as untimely:

The court granted plaintiff a judgment of foreclosure and sale … . Defendant moved pursuant to CPLR 2221 to vacate the judgment based on FAPA.

The court should not have determined that the motion was untimely. Generally, a CPLR 2221 motion based upon a change in the law must be made prior to the entry of a final judgment or before the time to appeal has fully expired … . However, following the Court of Appeals’ decision in Article 13 LLC v Ponce De Leon Fed. Bank ( —NY3d—, 2025 NY Slip Op 06536 [2025]), this Court held that “the only way to effectuate the retroactive application of FAPA after a judgment has been entered and the time to appeal has expired, is by filing a motion to renew before the sale is conducted” … . Defendant followed this precise process.

Accordingly, this matter is remanded for further proceedings, including consideration of the parties’ arguments concerning whether retroactive application of FAPA would violate the Takings and Due Process Clauses … . Bank of N.Y. Mellon v Adam P10tch, LLC, 2026 NY Slip Op 02596, First Dept 4-28-26

Practice Point: After the judgment of foreclosure and the expiration of the time for appeal, but before the sale of the property, a defendant can still make a motion to vacate the judgment based on the FAPA (CPLR 2221).

 

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DEFENDANT IN THIS FORECLOSURE TRANSFERRED THE SUBJECT PROPERTY TO A THIRD PARTY DURING THE PROCEEDINGS WHICH ORDINARILY WOULD DIVEST DEFENDANT OF STANDING; HOWEVER, PLAINTIFF DID NOT WAIVE A DEFICIENCY JUDGMENT AND THE TIME FOR SEEKING A DEFICIENCY JUDGMENT HAD NOT PASSED; BECAUSE DEFENDANT RETAINED AN INTEREST IN DEFENDING AGAINST A DEFICIENCY JUDGMENT, DEFENDANT HAD STANDING TO ARGUE THE RPAPL 1304 NOTICE WAS JURISDICTIONALLY DEFECTIVE; THE NOTICE ARGUMENT, HOWEVER, WAS REJECTED (FIRST DEPT).

The First Department, in a full-fledged opinion by Justice Moulton, determined defendant in this foreclosure action had standing to argue the RPAPL 1304 notice of foreclosure was jurisdictionally defective, despite defendant’s transfer of the subject real property during the foreclosure proceedings. Plaintiff had not waived a deficiency judgment and the time for seeking one had not elapsed. Therefore defendant still had an interest in defending the action, i.e., defendant had standing to contest the notice. The First Department rejected defendant’s notice argument:

It is well settled that a defendant lacks standing to defend the action where it transfers the mortgaged property to a third party during the foreclosure action and the plaintiff waives its right to a deficiency judgment * * *.

… [I]n this case, plaintiff chose not to waive a deficiency judgment and its time to move for a deficiency judgment has not yet expired. Because [defendant] is subject to a potential deficiency judgment and is a debtor on the underlying mortgage, he has an interest in defending the action notwithstanding that he transferred the mortgaged property … and as a result, no longer has the right to redeem the property. Nationstar Mtge. LLC v Vassi, 2026 NY Slip Op 02375, First Dept 4-21-26

Practice Point: If the time for seeking a deficiency judgment in a foreclosure has not passed, a defendant who transferred the subject property to a third party during the foreclosure proceedings still has standing, i.e., defendant has an interest in defending against a deficiency judgment. However, if the plaintiff had waived a deficiency judgment defendant would have lost standing.

 

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PLAINTIFF IN THIS FORECLOSURE ACTION DELAYED SIX YEARS BEFORE RESTORING THE ACTION TO THE ACTIVE CALENDAR AND FOUR YEARS BEFORE MOVING FOR LEAVE TO ENTER A DEFAULT JUDGMENT; INTEREST ON THE MORTGAGE DEBT SHOULD HAVE BEEN TOLLED FOR THOSE PERIODS (SECOND DEPT).

The Second Department, reversing Supreme Court, determined that interest on the mortgage debt in this foreclosure action should have been tolled because plaintiff failed to explain a six-year delay in restoring the action to the active calendar and its four-year-delay in moving for leave to enter a default judgment:

… Supreme Court should have granted the defendant’s application to toll the accrual of interest on the note from November 1, 2011, to September 13, 2022. “‘A foreclosure action is equitable in nature and triggers the equitable powers of the court'” … .. “‘Once equity is invoked, the court’s power is as broad as equity and justice require'” … . “‘In an action of an equitable nature, the recovery of interest is within the court’s discretion. The exercise of that discretion will be governed by the particular facts in each case, including any wrongful conduct by either party'” … .

Here, the plaintiff failed to explain its six-year delay in moving to restore the action to the active calendar, and further failed to explain its four-year delay in moving for leave to enter a default judgment against the defendant and for an order of reference after the action was restored to the active calendar. Under the circumstances of this case, since the defendant was prejudiced by these unexplained delays, during which time interest had been accruing, the interest on the note should have been tolled from November 1, 2011, to September 13, 2022 … . Greenpoint Mtge. Funding, Inc. v McFarlane, 2026 NY Slip Op 01945, Second Dept 4-1-26

Practice Point: Foreclosure actions are equitable in nature. Here undue delays by the plaintiff warranted tolling the accrual of interest for more than ten years.

 

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THE AFFIANT DID NOT SUBMIT THE BUSINESS RECORDS DEMONSTRATING THE NOTE WAS PHYSICALLY DELIVERED TO THE PLAINTIFF BEFORE THE FORECLOSURE ACTION WAS COMMENCED AND DID NOT DEMONSTRATE SHE HAD PERSONAL KNOWLEDGE THAT PLAINTIFF POSSESSED THE NOTE AT THE TIME THE ACTION WAS COMMENCED; THEREFORE PLAINTIFF DID NOT DEMONSTRATE STANDING TO FORECLOSE (SECOND DEPT).

The Second Department, reversing Supreme Court, determined the documentary evidence submitted by plaintiff mortgage company to demonstrate it had standing to foreclose was insufficient:

“A plaintiff establishes its standing in a mortgage foreclosure action by demonstrating that, when the action was commenced, it was either the holder or assignee of the underlying note” … . “The plaintiff meets this burden with proof of either a written assignment of the underlying note or the physical delivery of the note endorsed in blank or specially to it prior to the commencement of the foreclosure action” … .

Here, an affidavit of Teresa Swayze, an assistant vice president of the plaintiff’s servicing agent, submitted in support of the plaintiff’s motion for leave to renew, was insufficient to establish that the plaintiff possessed the note at the time this action was commenced. Swayze averred that the note was physically delivered to the plaintiff prior to the commencement of this action and attached to her affidavit a copy of the note with an allonge endorsed in blank. However, Swayze failed to submit the business record on which she relied for her assertion that the note was physically delivered to the plaintiff prior to the commencement of this action … . Moreover, Swayze’s affidavit did not demonstrate that she had personal knowledge of whether the plaintiff possessed the note at the time of the commencement of this action … . Federal Natl. Mtge. Assn. v Ayoola, 2026 NY Slip Op 01772, Second Dept 3-25-26

 

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A STIPULATION TOLLING THE STATUTE OF LIMITATIONS IS ENFORCEABLE, DESPITE THE RETROACTIVE APPLICATION OF THE FORECLOSURE ABUSE PREVENTION ACT (FAPA) (FIRST DEPT).

The First Department, in a full-fledged opinion by Justice Michael, reversing Supreme Court, determined that, although the foreclosure action would have been untimely pursuant to the Foreclosure Abuse Protection Act (FAPA) because the plaintiff’s voluntary discontinuance no longer can stop the running of the statute of limitations, here the parties had entered a stipulation tolling the statute of limitations. Supreme Court erred by finding the stipulation unenforceable:

Plaintiff’s prior mortgage foreclosure action against defendant was commenced on July 25, 2008, which indisputably accelerated the entire loan. On May 4, 2011, the parties agreed to discontinue the foreclosure action without prejudice via written stipulation. They also agreed that “the statute of limitations for any claims of plaintiff or defendant against the other is hereby tolled from July 22, 2008 . . . until June 1, 2013.” The stipulation was executed by the parties’ respective counsel and filed with the court. Plaintiff subsequently commenced this foreclosure action on February 16, 2018 and moved for summary judgment. Defendant cross-moved to dismiss the complaint, arguing that plaintiff’s action was time-barred under FAPA. * * *

Simply put, despite FAPA’s retroactive application, the parties’ 2011 stipulation in which they expressly agreed to toll the limitations period to June 1, 2013 effectively tolled the limitations period to that date. Plaintiff’s commencement of this action on February 16, 2018, less than six years later, was thus timely. HSBC Bank USA, N.A. v Nicholas, 2026 NY Slip Op 01461, First Dept 3-27-26

Practice Point: A valid stipulation tolling the statute of limitations will be enforced even where, pursuant to FAPA, the revived foreclosure action would otherwise have been untimely.

 

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UNDER THE FORECLOSURE ABUSE PREVENTION ACT (FAPA), A DEFENDANT CAN RENEW A SUMMARY JUDGMENT MOTION AFTER A JUDGMENT OF FORECLOSURE AND AFTER THE TIME FOR APPEAL HAS EXPIRED AS LONG AS THE SALE HAS NOT YET BEEN CONDUCTED (FIRST DEPT).

The First Department, reversing Supreme Court, determined the defendant’s motion for renewal of its summary judgment motion in this foreclosure proceeding should have been granted. The motion was based upon the retroactive application of the Foreclosure Abuse Prevention Act (FAPA). Renewal should be granted after a judgment of foreclosure and after the time for appeal has expired if the sale has not yet been conducted:

Generally, “a motion for leave to renew based upon an alleged change in the law must be made prior to the entry of a final judgment, or before the time to appeal has fully expired” … . However, in Article 13 LLC v Ponce De Leon Fed Bank, the Court of Appeals clarified the application of the Foreclosure Abuse Prevention Act (FAPA), finding that it applies retroactively and to all foreclosure actions in which “a final foreclosure sale had not been enforced prior to its effective date, including actions pending at the time of its effective date” … .

A judgment of foreclosure and sale is deemed enforced when the sale is concluded … . Therefore, the only way to effectuate the retroactive application of FAPA after a judgment has been entered and the time to appeal has expired, is by filing a motion to renew before the sale is conducted … . Based on a change in the law with the enactment of the FAPA, [defendant’s] motion for leave to renew pursuant to CPLR 2221(e)(2), was timely … . 21st Mtge. Corp. v Jin Hua Lin, 2026 NY Slip Op 01116, First Dept 2-26-26

Practice Point: The Foreclosure Abuse Prevention Act (FAPA) allows a defendant to renew a motion for summary judgment after a judgment of foreclosure and after the time for appeal has expired if the foreclosure sale has not yet been conducted.

 

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THE MORTGAGE DEBT WAS ACCELERATED WHEN THE FIRST FORECLOSURE ACTION WAS BROUGHT IN 2008; THE DEFENDANTS SUBSEQUENTLY ENTERED A LOAN MODIFICATION AGREEMENT IN 2008 WHICH DEACCELERATED THE DEBT AND RESET THE STATUTE OF LIMITATIONS; THE DEFENDANTS DEFAULTED AGAIN IN 2009; IN 2018 THE DEBT WAS ACCELERATED AGAIN BY THE FILING OF THE INSTANT FORECLOSURE ACTION; BECAUSE THE SIX-YEAR STATUTE OF LIMITATIONS STARTS RUNNING FROM EACH MISSED PAYMENT, THE 2018 FORECLOSURE ACTION WAS TIMELY BROUGHT (THIRD DEPT).

The Third Department, reversing Supreme Court, in a full-fledged opinion by Justice Clark, determined the foreclosure action was timely brought. The mortgage was initially accelerated in 2008 when the first foreclosure action was brought. But later in 2008 the defendants entered a loan modification agreement. That agreement validly revoked the acceleration of the debt and reset the statute of limitations. Defendants again defaulted on the mortgage payments in 2009. They argued that the statute of limitations started running upon their 2009 default, rendering the current foreclosure action untimely. The Third Department disagreed, finding that the plaintiff was not obligated to foreclose upon the first missed payment. Rather the plaintiff could wait and accelerate the debt upon any subsequent default, subject to the forfeiture of the right to recover any missed payments which occurred more than six years before the action was brought (each missed payment triggers a six-year statute of limitations):

… [P]laintiff submitted evidence establishing that the 2008 acceleration was validly revoked through the execution of the loan modification agreement, thereby causing the statute of limitations to reset as of that date. Defendants do not dispute that, even after FAPA [Foreclosure Abuse Prevention Act], a validly executed loan modification agreement can reset the statute of limitations period on a previously accelerated loan, so long as the agreement complies with the writing requirements of General Obligations Law § 17-105 (1) … . * * *

Nothing in FAPA or the General Obligations Law changed the basic rule that the statute of limitations runs separately from the due date of each unpaid installment … , or, if the mortgagee elects to accelerate the entire debt, from the date of the acceleration … . * * *

Defendants’ missed payments in 2009 gave plaintiff the right to sue to recover such payments, but did not obligate plaintiff to do so. Instead, plaintiff could wait to exercise its option to accelerate the entire amount of the debt upon any subsequent default, in which case the statute of limitations would run from the date of the acceleration … , subject to forfeiture of the right to recover any missed payments that did not occur within six years prior to the commencement of the foreclosure action … . Ditech Fin. LLC v Temple, 2026 NY Slip Op 00951, Third Dept 2-19-26

Practice Point: A loan modification agreement entered within six years of the 2008 acceleration of the debt deaccelerated the debt and reset the statute of limitations (a scenario not changed by the Foreclosure Abuse Prevention Act [FAPA]).

Practice Point: The six-year foreclosure statute of limitations starts running upon each missed mortgage payment. Here the 2018 foreclosure action was timely because it was brought within six years of a missed payment. Any missed payments which occurred prior to six years before the 2018 foreclosure was commenced were forfeited.

 

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RETROACTIVE APPLICATION OF THE FORECLOSURE ABUSE PROTECTION ACT (FAPA) DOES NOT VIOLATE THE TAKINGS CLAUSE OF THE US AND NY CONSTITUTIONS (THIRD DEPT).

The Third Department, reversing Supreme Court, determined retroactive application of the Foreclosure Abuse Prevention Act (FAPA) does not violate the Takings Clause of the US and NY Constitutions. The Court of Appeals has already ruled that retroactive application of FAPA does not violate due process or the Contract Clause:

“Those who do business in [a] regulated field cannot object if the legislative scheme is buttressed by subsequent amendments to achieve the legislative end” … Federal Natl. Mtge. Assn. v Marshall, 2026 NY Slip Op 00946, Third Dept 2-19-26

 

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MEASUREMENT OF THE SIX-MONTH GRACE PERIOD FOR THE FILING OF A NEW ACTION AFTER DISMISSAL (WHICH WOULD OTHERWISE BE TIME-BARRED) PURSUANT TO CPLR 205(A) AND CPLR 205-A CLARIFIED IN AN OPINION (SECOND DEPT).

The Second Department, in a full-fledged opinion by Justice Dillon, clarified how the six-month grace period for filing a new action after dismissal (CPLR 205(a) and 205-a) is measured:

This appeal provides our Court with an occasion to resolve some inconsistencies in decisional authority regarding the timing of the termination event from which the six-month grace period under CPLR 205(a) and 205-a are measured. Under certain circumstances, both statutes permit the plaintiff a six-month window to recommence an action that otherwise would be untimely, measured from the “termination” of a prior action. Is the termination of the prior action the date an order of dismissal is executed by the court, the date the order of dismissal is entered with the clerk, or the date that the order of dismissal is served upon other parties with notice of entry? Is the termination of the prior action delayed 30 days for the potential filing of a notice of appeal pursuant to CPLR 5513(a) or a motion for leave to reargue pursuant to CPLR 2221(d), and further delayed by the appellate process when an actual appeal is undertaken, or is there no termination of the prior action until a final judgment is entered or served with notice of entry? The answer to these questions may make a crucial mathematical difference to the timeliness or untimeliness of actions commenced within or without the six-month grace periods under CPLR 205-a and 205(a). We conclude, for reasons stated below, that when no appeal is taken by a party from an order of dismissal, the six-month period for recommencing an action under CPLR 205-a, and by extension under CPLR 205(a), begins to run once 30 days have elapsed following service of the order of dismissal with notice of entry. HSBC Bank USA, N.A. v Hillaire, 2026 NY Slip Op 00353, Second Dept 1-28-26

Practice Point: Consult this opinion for a definitive discussion of how the six-month grace periods for the filing of a new otherwise time-barred action after dismissal pursuant to CPLR 205(a) and 205-a are measured.​

 

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