By Keith L. Abramson, Esq.

Frenkel LambertWeisman & Gordon, LLP

USFN Member (FL, NJ, NY)

On May 20, 2026, the New York Appellate Division, Second Department, issued a Decision and Order in US Bank National Association v. Nelson, ___ N.Y.S.3d ___ (2d Dept. 2026), involving the borrowers’ attempt to amend their answers, post-Judgment of Foreclosure and Sale, to raise a defense that the plaintiff lacked standing.

RPAPL 1302-a, which became effective on December 23, 2019, states, in relevant part:

Notwithstanding the provisions of subdivision (e) of rule thirty-two hundred eleven of the civil practice law and rules, any objection or defense based on the plaintiff’s lack of standing in a foreclosure proceeding related to a home loan, as defined in paragraph (a) of subdivision six of section thirteen hundred four of this article, shall not be waived if a defendant fails to raise the objection or defense in a responsive pleading or pre-answer motion to dismiss.  A defendant may not raise an objection or defense of lack of standing following a foreclosure sale, however, unless the judgment of foreclosure and sale was issued upon defendant’s default.  (emphasis added). 

Since its enactment, defendants in foreclosure actions have tried to persuade the courts that RPAPL 1302-a allows defendants to raise a defense based on lack of standing “at any time.”  The Appellate Division’s decision in Nelson is the latest in a number of cases in which the court continues to dispel that notion[1].

To understand the court’s decision in Nelson, it is important to consider the procedural history of the case. Nelson was commenced in September 2009, a decade before RPAPL 1302-a was enacted. The defendants interposed timely answers to the complaint but did not include the defense of lack of standing. Plaintiff was awarded summary judgment in 2015 over the defendants’ opposition, and defendants did not attempt to raise the defense at that time. Later, when the plaintiff moved for a Judgment of Foreclosure and Sale, defendants opposed and filed a cross-motion, arguing for the first time, inter alia, that plaintiff lacked standing to commence the action. By Decision and Order dated December 15, 2015, the court granted the plaintiff’s motion and denied the cross-motion, holding that the standing defense should have been raised previously when plaintiff successfully sought summary judgment and an order of reference. The defendants’ first appeal followed.

On January 23, 2019, still prior to the enactment of RPAPL 1302-a, the Appellate Division, Second Department, affirmed the Judgment of Foreclosure and Sale, holding in part that the defendants waived the defense of lack of standing by failing to raise the affirmative defense in their answers. US Bank National Association v. Nelson, 169 A.D.3d 110, 93 N.Y.S.3d 138 (2d Dept. 2019). Defendants moved for leave to reargue the appeal or, in the alternative, for leave to appeal to the Court of Appeals. The court denied leave to reargue but granted leave to appeal to the Court of Appeals.

On December 17, 2020, the New York State Court of Appeals handed down its Memorandum opinion affirming the order of the Appellate Division. The Court concluded that, “under the circumstances of this case, Supreme Court did not err in granting plaintiff’s motions for summary judgment and for a judgment of foreclosure and sale.” US Bank National Association v. Nelson, 36 N.Y.3d 998, 999, 163 N.E.3d 49, 139 N.Y.S.3d 118 (2020). The Court held that, under the law in effect at the time of the orders appealed from, the defense of lack of standing had been waived by the defendants by failing to raise standing in their answers or in pre-answer motions as required by CPLR 3211(e).  Id. The Court expressly stated that it did not reach the issue of whether RPAPL 1302-a, enacted while the appeal was pending, would afford defendants an opportunity to raise standing at this stage of the litigation, and the Court remitted to the Supreme Court for further proceedings.

Back in Supreme Court, the defendants moved for leave to amend their answers to add a defense that the plaintiff lacked standing, to vacate summary judgment and the judgment of foreclosure and sale, and for related relief. In their motion, defendants argued that, pursuant to RPAPL 1302-a, “the defense of standing is not waivable and can be raised at any time prior to a foreclosure sale.”  Plaintiff opposed, and the trial court, relying heavily on the language of the Court of Appeals’ opinion, held that “1302-a does not allow a defendant who defended the action on the merits to raise standing following the grant of judgment of foreclosure and sale.” Unlike at the motion for summary judgment stage, where attempts to raise standing for the first time should be credited, the court observed that “[t]here appears to be no appellate precedent supporting the proposition that a non-defaulting defendant can raise a standing defense post-JFS.”  Accordingly, the defendants’ motion was denied by the trial court. Once again, the defendants appealed.

The Appellate Division affirmed, holding that “the Supreme Court, upon determining that RPAPL 1302-a did not provide an independent basis to vacate a judgment of foreclosure and sale, properly denied the defendants’ motion”.  Nelson, supra, ___, N.Y.S.3d ___ (2d Dept. 2026). It remains to be seen whether the defendants will seek leave to appeal to the Court of Appeals, or whether such leave will be granted.  But for now, the law is clear: A defense that the plaintiff lacks standing may not be raised “at any time.”  More specifically, RPAPL 1302-a does not permit a non-defaulting defendant to raise a standing defense post-Judgment of Foreclosure and Sale.

Copyright © 2026 USFN

USFNews - June 10, 2026

Frenkel Lambert Weisman & Gordon, LLP advise of new legislation awaiting delivery to the Governor of New York for signature.

As the federal government has rolled back protections for consumers and small businesses, this Act
seeks to fill the void left behind. The “Fostering Affordability and Integrity through Reasonable Business
Practices Act (“FAIR Business Practices Act”) seeks to strengthen New York’s consumer protection law,
to wit: General Business Law §349. The legislation proposes an expansion of GBL §349 to include not
only deceptive acts but those that are “unfair” and “abusive”. The Act also expands protection not only
to individual consumers but to businesses and nonprofits, reasoning that these entities are no better at
defending themselves from unfair, abusive and deceptive conduct than an individual consumer.

As such GBL §349 was amended to add definitions of both “unfair” acts or practices as well as “abusive”
acts or practices. Enforcement of unfair or abusive acts is limited strictly to the Attorney General if the
AG believes from satisfactory evidence, that any person, firm, corporation, company, partnership or
association or any agent or employee thereof, has engaged or is about to engage in any unfair,
deceptive or abusive acts or practices. Such action may be brought against any “person conducting any
business, trade or commerce or furnishing a service in New York State…” The Act seeks to eliminate the
limitation imposed by courts upon the AG’s power to enforce the statute to acts that are “consumer oriented” or that have an impact on the public at large. As such, private transactions by businesses
engaged in deceptive, unfair or abusive acts are susceptible to enforcement by the Attorney General.

Any person injured by reason of a deceptive act or practice may still bring a private right of action to
enjoin such practice or recover damages as has always been the law.

Some examples of the protections this legislation is designed to address include, but are not limited to,
deed theft, junk fees, data breaches, mortgage servicers who deceptively steer people into higher cost
loans and companies who take advantage of consumers with limited English proficiency and/or obscure
pricing information and fees.

View the legislation here.

by Brian Goldberg, Esq.

Gross Polowy, LLC

USFN Member (NJ, NY)

            One of the most important issues in New York foreclosure litigation is the proper use of business records to help plaintiffs prove their cases. With the likelihood that the servicing of a given loan has transferred through the offices of multiple entities, it is essential that servicers maintain good working relationships with each other to avoid delays and dismissals. Without cooperation, teamwork, and the prompt exchange of information and records, a plaintiff will be unable to defeat hearsay objections, and, consequently, will be unable to prove its case.

Black’s Law Dictionary defines hearsay as “a term applied to that species of testimony given by a witness who relates, not what he knows personally, but what others have told him, or what he has heard said by others. Hearsay evidence is that which does not derive its value solely from the credibility of the witness, but rests mainly on the veracity and competency of other persons. The very nature of the evidence shows its weakness, and it is admitted only in specified cases from necessity.” The business records relied upon by the default servicing industry in the prosecution of foreclosure actions are perfect examples of the textbook definition of hearsay.

            Servicers rely upon numerous departments and individuals to create and maintain business records reflecting every transaction and communication related to each loan within a portfolio. There is no single person who could personally testify to every action taken on the account. Complicating the situation is the likelihood that loans will be acquired and service transferred numerous times throughout the term. How is it possible for one servicer to properly prosecute a foreclosure action when the business records were created by various people across different servicers, especially in New York where the courts and legislature have been notoriously pro-borrower?

            Fortunately, the New York Legislature enacted Section 4518 of the Civil Practice Law and Rules, which provides an exception to hearsay based upon proper creation and maintenance of business records. As long as a witness can testify that the organization’s records were created and maintained in the ordinary course of business, and that it was the regular course of such business to make such records at or near the time of the transaction or event, the business record will be excepted from a valid hearsay objection.

This exception applies to all documents created by employees of the servicer who are not testifying at the time of trial or executing an affidavit to be included with a motion or opposition to a motion. The impacted records include, but are not limited to, the servicing notes, proof of possession of the note, the payment history, the letter log, and judgment figures. Without the hearsay exception, none of these records would be admissible because they are being attested to by someone who does not have personal knowledge of the actual events. In order for these records to be admissible under the hearsay exception, the witness must provide foundational testimony about their knowledge, training, and experience with the recordkeeping systems. Additionally, the following questions must be answered affirmatively by the affiant/witness:

1. Was the document created in the ordinary course of business?
2. Is the document maintained in the ordinary course of business?
3. Was the document created at or near the time of the event reflected within the document?
4. Was the document created by someone who had firsthand knowledge of the event reflected within the document?
5. Was the document created by someone who had a duty to report honestly and accurately within the recordkeeping system(s)?

            A challenging issue arises when a new servicer testifies to servicing activities handled by a prior servicer or third-party. Since the witness does not have personal knowledge of the business practices and recordkeeping practices of the prior servicer, any such testimony would be considered hearsay, and any attempt to have the records admitted into evidence would require multiple witnesses or multiple affidavits, which is an undue timeline delay and increases the costs of a foreclosure action. However, with a proper onboarding process and a detailed review of the records, the New York courts allow the current servicer to testify and/or attest to the information contained within records created by a prior servicer or other entity.

            In Bank of N.Y. Mellon v. Gordon, 171 A.D.3d 197 (2^nd Dept. 2019), the Appellate Division, Second Department set forth the foundation that must be laid by the new entity so that the witness can rely upon, and testify to, the records of the other entity. In Gordon, the Court held that, “It is true that as a general rule, ‘the mere filing of papers received from other entities, even if they are retained in the regular course of business, is insufficient to qualify the documents as business records.’ However, such records may be admitted into evidence if the recipient can establish personal knowledge of the maker’s business practices and procedures, or establish that the records provided by the maker were incorporated into the recipient’s own records and routinely relied upon by the recipient in its own business.  The reports of an independent contractor regularly relied on by the business may qualify as the business’ record.”

            Based upon the Gordon ruling, there are two ways in which the current servicer can attest/testify to the records of a different entity:

1. Have personal knowledge of the business practices of the entity that created the records; OR

2. Establish that the subject records were incorporated into the current servicer’s system(s) of record and relied upon in the daily servicing of the loan.

Not only can the methods set forth in Gordon be used to testify to the records of a prior servicer, but the case law also applies to third-party mailing agents. While it is helpful to have personal knowledge of the mailing practices and procedures of the third-party mailing agents, it is unnecessary if the loan servicer incorporated the notices and the agent’s mailing logs into its own system and relied upon those documents in the servicing of the loan. Reliance can be proven by testifying that the loan servicer would not have commenced the subject action unless the records reflected that the notices were mailed to the borrower(s) at the proper addresses in compliance with the terms of the mortgage and New York Real Property Actions and Proceedings Law §1304.

            The Gordon decision, and its progeny, exhibit an increasing need for servicers and other entities to cooperate with each other so that a foreclosure case can be completed as quickly and as cost-effectively as possible. If servicers do not provide the records at the time of transfer or upon request, the plaintiff has no other option but to issue subpoenas for documents and testimony, and to request the execution of detailed affidavits. This is a timely, costly, and unnecessary process that can lead to extended foreclosure timelines and missed court deadlines. With the enactment of the Foreclosure Abuse Prevention Act, any missed deadlines can lead to the dismissal of foreclosure actions and leave the plaintiff unable to recommence a new action.

            It is more important than ever that servicers establish and follow a robust onboarding process and cooperate with each other in the exchange of documents and information, if needed post service transfer. The Gordon decision provides the default servicing industry a rare advantage in a state known for its lengthy and difficult foreclosure process, and servicers must make efficient use of that benefit to ensure successful and cost-effective outcomes for all.

Copyright @2023

USFNews - July 12

By Stephen J. Vargas, Esq.

Nicole Gazzo, Esq.

Adam Gross, Esq.

Gross Polowy LLC

USFN Member (NJ, NY)

On December 30, 2022, New York Governor Kathy Hochul signed the “Foreclosure Abuse Prevention Act”[1], which took effect immediately and applies to all pending, pre-sale residential mortgage foreclosures. The law applies retroactively to permit a homeowner to raise a statute of limitations defense based on the newly enacted amendments, even though the mortgage debt was not time-barred at the time the foreclosure was commenced. The new laws overrule the Court of Appeals’ decision in Freedom Mortgage Corporation vs. Engel[2] by eliminating a plaintiff mortgagee’s ability to unilaterally de-accelerate a loan by discontinuing a pending foreclosure action within the limitations period.

The new laws also amend multiple sections of the New York State Consolidated Laws impacting foreclosures:

·       CPLR §203 (method of computing periods of limitations generally) and CPLR §3217 (voluntary discontinuance) were amended to prevent a foreclosing party from unilaterally revoking the acceleration of a loan. After a loan has been accelerated (typically by the commencement of a foreclosure), a plaintiff cannot utilize a deceleration letter or voluntary discontinuance of the foreclosure to revoke the acceleration and return the loan to installment payment status for the purpose of re-setting the statute of limitations. If a foreclosing party or a predecessor-in-interest accelerated a loan and decelerated it based on the law that existed prior to the Act, then the new law allows a defendant to argue that the prior deceleration was invalid, and the foreclosure commenced more than six years from the initial acceleration is subject to dismissal with prejudice as time-barred.

·   CPLR §205-a (termination of certain actions related to real property) is a new residential mortgage foreclosure-specific “savings statute” that imposes greater limitations on the ability to recommence a foreclosure if a prior foreclosure was dismissed outside the statute of limitations. The old “savings statute” (CPLR §205(a)) was available to a foreclosing party unless the prior foreclosure terminated by means other than voluntary discontinuance, failure to obtain personal jurisdiction over the defendant, a judgment on the merits, or neglect to prosecute (defined by appellate courts as a pattern of neglect, rather than a single, isolated neglectful omission or violation of a law or rule).

The new rule contains these prohibitions, but broadly defines neglect to include any omission that results in dismissal, including but not limited to: failure to move for an order of reference within one year from when the case is released from the foreclosure settlement conference part; failure to comply with a demand to resume prosecution; and failure to comply with any deadline order, appear at a court conference, or timely submit a proposed order or judgment. If a foreclosure is dismissed based on any of these failures more than six years from acceleration, then a new foreclosure is prohibited.

Additionally, CPLR §205-a is unavailable to a purchaser that bought a loan during the foreclosure process because it restricts its provisions to the original plaintiff and prohibits an assignee that came into ownership and possession of a note during a pending foreclosure from utilizing the savings provision. Thus, only the same entity that commenced the foreclosure that was dismissed can rely on the “savings statute,” and a new owner of the loan cannot, making foreclosure of the assignee’s loan time-barred. The law requires a foreclosing party that utilizes the “savings statute” to “plead and prove” it was the holder of the note and mortgage at the commencement of both the prior and re-commenced foreclosures. The retroactivity provision provides a defendant that answered the complaint with a ground to challenge a pending foreclosure commenced based on the “savings statute” if the foreclosing party is a different entity than the one that commenced the prior foreclosure, as well as if the prior foreclosure was dismissed for any neglect specified in the section.

·   RPAPL §1301 (separate actions for mortgage debt) was amended to prohibit the commencement of a new foreclosure while a prior foreclosure is pending unless the foreclosing party obtains permission from the court in which the action is pending to commence the subsequent foreclosure. This permission is a condition precedent to filing a subsequent foreclosure while the initial foreclosure has not been dismissed or voluntarily discontinued. If a foreclosing party elects to terminate a foreclosure for the purpose of commencing a new foreclosure, then it should voluntarily discontinue the initial foreclosure as soon as practicable and with enough time to mail a new 90-day notice and recommence the foreclosure before the 6-year SOL expires.

·     General Obligations Law §17-105 (promise & waivers affecting the time limited for action to foreclose a mortgage) was amended to establish that any promise or agreement to make payments will not extend the time for commencement of an action, unless it is in writing. To comply with the amendment, servicers should enter into written settlement agreements in connection with loss mitigation settlements.

·    CPLR §213 (actions to be commenced within six years) was amended to prohibit a foreclosing party or mortgagee defending a quiet title claim seeking to cancel and discharge a mortgage as time-barred from arguing a prior acceleration was invalid absent an expressed judicial determination, made upon a timely interposed defense, that the mortgage and note were not validly accelerated.

If a First Legal-stage loan is impacted by the Act (including, but not limited to, if a foreclosing party relied on a deceleration letter or voluntary discontinuance to revoke a prior acceleration or the “savings statute” after a neglect-based dismissal or mid-foreclosure transfer of the note and mortgage), then a new foreclosure cannot be commenced because the limitations period expired.

If a loan is the subject of a pending, contested foreclosure where the statute of limitations is at issue, then there is a high likelihood the foreclosure will be dismissed with prejudice based on the expiration of the statute of limitations, in which case remediation such as “advancing the due date” to within the six-year limitations period will not cure the defect. Any attempt to collect or recover a time-barred mortgage debt – including, but not limited to oral or written communication to the borrower concerning loss mitigation or threatening foreclosure – would create Fair Debt Collection Practices Act exposure for a debt collector law firm and loan servicer. Therefore, a foreclosing party and its servicer must exhaust litigation strategies (including motion and appellate practice) and consider all financially feasible loss mitigation home retention and liquidation options as an alternative to litigating a statute of limitations defense.

Further, by expanding the definition of neglect to include many common reasons for dismissal, any potential delay may result in a dismissal with prejudice. In the past, dismissals based upon neglect were often able to be vacated; however, that is unlikely under the new law. The servicer and counsel must work together to ensure the foreclosure moves forward in a timely manner and all court deadlines are met.

This law is new and contains many changes, and it is impossible to know how the courts may interpret the various provisions. Many questions related to the new law or potential updates to the law may occur post-publication of this article. If so, please consult with your New York counsel of choice.