ALBANY, N.Y.— NAFCU and several other trade associationshavesent a letter to New York Governor Kathy Hochul and leaders in the New York State Senate expressing their concerns over the Foreclosure Abuse Prevention Act (“FAPA”), S5473D, which passed this week.
The groups sent the letter ahead of the legislation’s passage.
In the letter, the groups asked for more time to study the impacts it could have on real estate markets in New York and housing affordability in the state. Following its passage, NAFCU said it will continue to work with member credit unions in New York to ensure they are protected if the bill is enacted. Gov. Hochul still has the opportunity to veto the bill before it becomes law, NAFCU noted.
The FAPA bill would reverse current law regarding the application of the statute of limitations to foreclose on a mortgage in New York. As of now, a mortgage lender can suspend its right to revoke an election to accelerate a mortgage, effectively pausing the statute of limitations. This de-acceleration process was affirmed by the New York Court of Appeals in a 2018 case, Freedom Mortgage Corporation v. Engel (“Engel”), according to NAFCU.
“The bill would effectively undo the de-acceleration option,” NAFCU stated. “This means that the six-year statute of limitations period would continue from the date of that initial foreclosure action; and once the statute of limitations expires, the lender may no longer foreclose on the property. The bill would also apply retroactively to mortgage foreclosures where no final judgment of foreclosure and sale has been enforced.”
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