A New York appeals court just shut down Deutsche Bank’s foreclosure bid after missed deadlines and a new law—find out what this means for lenders
Deutsche Bank lost its chance to foreclose on a Queens property after missing deadlines and running into New York’s tougher foreclosure law.
Here’s how it unfolded. Back in 2010, Deutsche Bank National Trust Company kicked off foreclosure proceedings against Mohammad Nuruzzaman and others over a residential property in Queens. Things didn’t go as planned. In 2017, the court dismissed the foreclosure—not because of the loan itself, but because Deutsche Bank failed to follow a court scheduling order. That kind of procedural misstep might seem small, but as this case shows, it can have major consequences.
Deutsche Bank tried to get the dismissal overturned, but the court denied the request. The bank then appealed, but that appeal was dismissed in 2020 for not being completed properly. Meanwhile, New York’s six-year statute of limitations for foreclosures was running out. Once a lender accelerates a mortgage, that six-year clock starts ticking, and if it runs out before a new foreclosure action is filed, the lender is out of options.
The homeowners didn’t wait around. In 2018, they filed their own lawsuit, asking the court to cancel and discharge the mortgage, arguing that too much time had passed for Deutsche Bank to try again. The bank, still hoping for another shot, filed a new foreclosure action in 2021, relying on a legal rule that sometimes gives lenders a second chance after a dismissal.
But the legal landscape was shifting. New York passed the Foreclosure Abuse Prevention Act (FAPA), a law that made it much tougher for lenders to refile foreclosure cases after a procedural dismissal. FAPA was designed to prevent repeated foreclosure filings and give homeowners more certainty.
On September 10, 2025, the Appellate Division, Second Department, issued its decision. The court sided with the homeowners, ruling that the statute of limitations had expired and, because the original foreclosure was dismissed for not following a court order, FAPA blocked Deutsche Bank from refiling. The court also rejected the bank’s arguments that the new law shouldn’t apply retroactively.
The result? The court ordered the mortgage canceled and discharged. For mortgage professionals, this case is a clear reminder that missing court deadlines isn’t just a technicality—it can mean losing the right to foreclose altogether. With laws like FAPA now in effect, the risks for lenders and servicers are higher than ever.
This case is a wake-up call for the industry. Staying on top of court procedures and understanding how new laws impact foreclosure actions isn’t just best practice—it’s essential. The legal environment is changing, and lenders need to be vigilant to avoid costly mistakes.
While there were no insurance policy issues in this case, the outcome is a timely lesson for mortgage professionals everywhere. The rules are getting stricter, and the courts are enforcing them. If you’re handling foreclosures in New York or any state with evolving laws, make sure your processes are rock solid. Otherwise, you could find yourself in the same position as Deutsche Bank—out of court, with no way to recover the loan.
