At James J. Quail & Associates, P.C., we are committed to standing up for homeowners and holding lenders accountable under the law. In another recent success, our firm secured the dismissal of a foreclosure action brought by HSBC Bank USA, N.A., in Nassau County Supreme Court based on the statute of limitations and bolstered by protections granted under the Foreclosure Abuse Prevention Act (FAPA).
The Case: HSBC Bank v. Min Young You – A Fight for Finality
Our clients, Min Young You and Jin Woong Yu, faced a foreclosure action initiated in 2018 regarding their property in Plainview, New York. However, this was not the first attempt by the lender. HSBC Mortgage Corporation had already accelerated the loan and commenced foreclosure in 2009. That earlier case was voluntarily discontinued in 2014.
Although the bank believed that discontinuing the 2009 case effectively revoked the acceleration, we saw the facts differently, and the law now agrees.
The Legal Strategy: FAPA Changes the Rules
When we initially argued the case, courts followed the now-overruled precedent of Freedom Mortgage Corp. v. Engel, which allowed lenders to unilaterally "de-accelerate" a mortgage by discontinuing an action. But in 2022, the New York Legislature enacted the Foreclosure Abuse Prevention Act, correcting what many saw as a loophole that favored lenders.
FAPA specifically amended the law to state that voluntary discontinuance does not reset or pause the statute of limitations. Armed with this change in the law, we moved to renew our earlier arguments and asked the court to dismiss the case as untimely.
The Result: Case Dismissed and Mortgage Extinguished
On December 16, 2024, the court granted our motion. The judge found that the statute of limitations began in 2009 with the first foreclosure action and, even accounting for a temporary bankruptcy toll, expired in January 2017. Because HSBC didn’t bring this new action until 2018, it was too late, and FAPA barred any attempt to revive the claim.
Not only was the foreclosure case dismissed in full, but the court also directed the Nassau County Clerk to cancel all notices of pendency recorded against the property. Our clients can now breathe freely, knowing their home is no longer under the shadow of foreclosure.
Why This Matters for Homeowners
This victory is more than just a win for one family; it’s a powerful reminder that the statute of limitations is a vital protection. Lenders cannot use procedural tactics to extend foreclosure threats indefinitely. The Foreclosure Abuse Prevention Act was designed to give borrowers finality, and courts are now enforcing it as the law intended.
Facing Foreclosure? Time Could Be on Your Side
If you're a homeowner facing foreclosure in New York, especially if a prior foreclosure was filed years ago, your case may be time-barred. The foreclosure clock may have started long ago, and lenders can no longer reset it at will.
At James J. Quail & Associates, P.C., we have the experience and tenacity to challenge improper foreclosure actions. We understand the law, and we know how to use it to protect your rights.