Adam Swanson speaks to Law360 to discuss the Second Circuit’s recent ruling urging the New York Court of Appeals to provide guidance on whether New York’s Foreclosure Abuse Prevention Act (FAPA) applies retroactively. “The Second Circuit’s decision should motivate the state appeals court to address the state law as lower courts are grappling with how to interpret the statute,” says Adam, who along with Jessie Bonaros, worked on an amicus brief submitted by lending industry groups to the Second Circuit. A three-judge panel found that the New York Court of Appeals should answer the retroactive question first as a matter of New York State law so the Second Circuit can decide when the statute of limitations on beginning a foreclosure began to run according to the requirements of FAPA. Then, if the statute is found to be retroactive under state law, the Second Circuit must later decide whether the constraints under the United States Constitution allow FAPA to have that retroactive effect.
“The lower judiciary is a mess right now. There are decisions one way, there are decisions the other,” Adam says. “Suffice it to say, in Rockland County, you may be good — in Brooklyn, probably not. You have different outcomes depending on what county you are in, and that’s the opposite of what laws are supposed to accomplish.”
Adam says lenders have been just as confused by FAPA’s language since its passage. “The decision really highlighted the struggles of the industry and the New York state judiciary in trying to understand what’s intended by FAPA,” he says. “We’ve read the act, we’ve looked at its language, and it doesn’t make sense, which is what the whole industry is grappling with right now.”