A recent court ruling shows how New York's foreclosure timing law is catching out lenders—including a major institution. Here's what went wrong.
A foreclosure lawsuit brought by Deutsche Bank National Trust Company has been struck down by a New York appeals court, marking another example of how the state’s Foreclosure Abuse Prevention Act (FAPA) is reshaping enforcement timelines in the mortgage industry.
The ruling, handed down by the Appellate Division, Second Department, on June 11, 2025, upheld a lower court’s decision that the bank’s foreclosure action was filed too late. For mortgage professionals navigating complex loan workouts or legacy portfolios, the decision underscores how timing can make or break a claim—especially under the stricter rules FAPA has introduced.
The story goes back to December 2007, when Impac Funding Corporation, doing business as Impac Lending Group, started foreclosure proceedings against homeowner Stewart Jean-Baptiste. In its complaint, Impac elected to accelerate the debt, declaring the entire unpaid balance immediately due. On June 18, 2012, Impac and Jean-Baptiste entered into a stipulation to discontinue the foreclosure action.
In February 2018, Deutsche Bank, as Impac’s successor in interest, brought a new foreclosure case against Jean-Baptiste and others. In his response, Jean-Baptiste argued that the action was time-barred under New York’s six-year statute of limitations and filed a counterclaim seeking to discharge the mortgage from the public record under RPAPL 1501(4).
In December 2019, he moved for summary judgment to dismiss the foreclosure, but the court denied that request in a November 2022 order. After the Foreclosure Abuse Prevention Act took effect in December 2022, Jean-Baptiste filed a motion to renew his earlier request, arguing that the new law applied retroactively and confirmed his position.
In July 2023, the Supreme Court in Kings County reversed course and ruled in his favor, stating that under FAPA, the 2007 acceleration triggered the statute of limitations and that voluntarily discontinuing the action in 2012 did not restart it. The court also granted Jean-Baptiste’s counterclaim to cancel and discharge the mortgage. Deutsche Bank appealed the decision, arguing that FAPA’s retroactive application violated the United States Constitution.
But the appellate court rejected those arguments. In its June 2025 decision, the Appellate Division affirmed that the statute of limitations began in 2007 when the first foreclosure action was filed and the loan accelerated. The court pointed to amendments made by FAPA, specifically CPLR 3217(e), which state that a voluntary discontinuance does not reset the statute of limitations. The court also declined to address the plaintiff’s constitutional challenge, citing precedent that supports FAPA’s retroactive application.
For lenders and servicers, the decision is a cautionary tale. Accelerating a loan starts the clock—and under FAPA, discontinuing a case doesn’t buy more time. That means foreclosure teams need to closely track deadlines, particularly on older loans that may appear actionable but are no longer enforceable under the law.
As New York courts continue to uphold FAPA, mortgage professionals should be alert to its impact on litigation strategy. When it comes to enforcement, the six-year window after acceleration is strict—and once it closes, there may be no way back.
