Adam Swanson speaks with New York Law Journal about the recent federal court decision dismissing another challenge to New York’s Foreclosure Abuse Prevention Act (FAPA). This decision highlights the difficulty of mounting a broad constitutional challenge to FAPA, which when enacted, launched years of litigation from mortgage investors and lenders.
Adam characterized the decision primarily as a jurisdictional ruling and said it highlights the difficulties of challenging a law that is generally applied by state court judges in individual foreclosure actions.
“The decision is largely jurisdictional and highlights one of the constraints of a 1983 action, which is that for effective relief there must be a state actor who can be restrained,” Adam told the New York Law Journal. Because FAPA is principally implemented through judicial rulings rather than executive enforcement, he said future challenges may need to arise through specific foreclosure cases rather than sweeping attacks on the statute itself.
“It is certainly challenging at this point, but no,” Adam said when asked whether significant constitutional challenges to FAPA are effectively foreclosed. “The issue is that many stakeholders keep seeing the constitutional propriety of the retroactive application of FAPA as a yes or no question when, in fact, there are many shades of gray.”
Adam posited that future challenges may find more traction where FAPA is applied to particular factual situations involving vested rights or final judgments.
“There are many ‘FAPA cases’ out there with differing factual scenarios, and there surely are cases with facts under which the retroactive application of FAPA would likely violate the constitution,” he said.
As an example, Adam pointed to situations involving unappealable final judgments of foreclosure and sale that have not yet been enforced, suggesting that retroactive application of FAPA in those circumstances could present different constitutional considerations than those addressed by courts to date.