A missed step under New York’s updated foreclosure law cost U.S. Bank its case – find out what this means for lenders and mortgage professionals
U.S. Bank’s foreclosure case was dismissed after the lender skipped a new step required by New York’s foreclosure law.
William and Maria Cullen’s mortgage story began in 2001, when they signed for a $375,000 loan on their Pelham, New York home. Fast forward to 2017, and U.S. Bank National Association was in court, seeking to foreclose after claiming the Cullens had defaulted. The Cullens fought back, arguing that U.S. Bank hadn’t followed all the required pre-foreclosure notice rules – an issue that’s become increasingly important in New York’s evolving legal landscape.
By May 2022, things seemed to be going U.S. Bank’s way. A court referee sided with the lender, and the Supreme Court allowed the foreclosure to move forward, appointing a referee to calculate the amount due. But the foreclosure process in New York is anything but simple, and the rules changed just months later.
At the end of 2022, the Foreclosure Abuse Prevention Act (FAPA) took effect, amending New York’s Real Property Actions and Proceedings Law (RPAPL) 1301(3). The new law says that if a lender wants to file a second foreclosure action on the same mortgage, it needs to get court approval first. If the lender skips that step and files anyway, the original case is automatically discontinued – no exceptions.
The Cullens’ attorneys quickly noticed the change and asked the court to reconsider the case. The Supreme Court agreed, vacated its earlier order, and dismissed U.S. Bank’s foreclosure complaint. U.S. Bank, not ready to give up, appealed the decision, hoping to get the case back on track.
While the appeal was still pending, U.S. Bank filed a new foreclosure action against the Cullens in March 2023 – again, without court approval. Under the new law, that move meant the original case was discontinued the moment the new one was filed, regardless of the appeal’s outcome.
On August 6, 2025, the Appellate Division, Second Department, confirmed this result. The court dismissed U.S. Bank’s appeal and awarded costs to the Cullens. The decision was based squarely on the amended RPAPL 1301(3), which the court said left no room for exceptions or second chances.
For mortgage professionals, this case is a wake-up call. New York’s foreclosure rules have changed, and missing a procedural step – no matter how small – can end a case, regardless of the circumstances. Lenders and their legal teams need to keep up with legislative changes and ensure every action, especially when starting a new foreclosure, follows the latest requirements to the letter.
The U.S. Bank v. Cullen decision isn’t just about one family’s mortgage. It’s a clear reminder to everyone in the mortgage business that even established lenders can lose their footing if they don’t follow the rules exactly. For those managing foreclosure portfolios or advising on compliance, staying current with the law is critical. A single missed step can shut down a foreclosure, no matter how strong the lender’s case might be.
The big takeaway: in New York’s current foreclosure landscape, attention to detail isn’t just helpful - it’s essential.
