New York’s FAPA law blocks lenders from restarting foreclosure after delays—here’s what changed
A New York court has clarified how new foreclosure laws limit lenders’ ability to restart mortgage actions after delays—impacting timelines for mortgage professionals statewide.
On October 29, 2025, the Appellate Division, Second Department, ruled in Bank of N.Y. Mellon Trust Co. v Kyung Lee, a case that started with a mortgage on a Mount Sinai condo. Back in 2006, Kyung Lee signed a loan agreement, which was eventually assigned to Bank of New York Mellon Trust Company. Fast forward to 2013, and the bank moved to foreclose after deciding to call in the full loan amount.
Here’s where it gets interesting for anyone in the mortgage business. The original foreclosure suit sat in court for years. Kyung Lee didn’t respond, and after a while, tried to get the case tossed for inactivity. That effort was first denied, but on appeal, the court agreed and dismissed the case in early 2022, saying the bank had let it sit too long.
Not long after, the property changed hands to 170H, LLC. The bank, not giving up, filed a new foreclosure case in August 2022—nearly nine years after the first action. 170H, LLC pushed back, arguing that the clock had run out. In New York, there’s a six-year window for these kinds of foreclosure actions, starting from when the lender says the whole loan is due.
The bank argued it still had time, pointing to a rule that sometimes gives lenders a six-month “do-over” if a case is dismissed for reasons other than the merits. But here’s the twist: while this was all playing out, New York lawmakers passed the Foreclosure Abuse Prevention Act (FAPA), which took effect at the end of 2022. This law tightened the rules, saying lenders can’t use that “do-over” if the first case was tossed for neglect—like letting it sit too long without action.
The appeals court sided with 170H, LLC. The judges said the six-year period started back in 2013 when the bank first accelerated the loan. Since the new case was filed more than six years later, and because FAPA now blocks the bank from using the six-month extension after a neglect dismissal, the court threw out the foreclosure action as too late.
For mortgage professionals, this decision is a wake-up call. It’s not just about one condo in Mount Sinai—it’s about how lenders across New York need to keep a close eye on foreclosure timelines and follow through without delay. The days of letting cases linger and then restarting them are over, at least when it comes to dismissals for inactivity.
The ruling also shows how quickly the legal landscape can shift. FAPA changed the game for lenders, and this case is one of the first to spell out exactly what that means in practice. If you’re managing a portfolio or advising on foreclosure strategy, the message is clear: stay on top of your cases, know the deadlines, and don’t count on a second chance if you let things slide.
This isn’t just a technical legal point. It’s a practical, dollars-and-cents issue that could affect how you manage risk and keep your operations running smoothly. The court’s decision is final for now, but it’s a safe bet that lenders and their legal teams will be watching closely—and adjusting their playbooks accordingly.
