🚨 SCOTUS Spotlight Hits Foreclosure Drama: Is New York’s FAPA Unconstitutional? 👀
Hey housing fam, buckle your seat belts — we’ve got some Supreme Court-level turbulence coming straight outta the Empire State 🏙️. A major power move is underway in the mortgage world, and it could shake the foundations of how foreclosures work not just in New York, but nationwide. Yep, it’s that deep 🔍.
The Short Version? A legal drama with national vibes is heating up, and here’s the 411: Five of the most prominent mortgage and banking trade groups in the U.S. are teaming up via powerhouse law firm Friedman Vartolo LLP — and they’re asking SCOTUS (aka the Supreme Court) to review a controversial New York foreclosure law called the Foreclosure Abuse Prevention Act (FAPA). 📜
But wait… why does this matter to you, to your mortgage, or even to investors eyeing the U.S. real estate market? Let’s get into it 👇
🧠 First, What Even Is FAPA?
FAPA was designed to stop what lawmakers considered “foreclosure abuse.” Basically, it sets tighter deadlines for how and when lenders can refile foreclosure actions. Think of it as a stopwatch on a ticking clock 🕰️ — once a lender starts the process, they’ve got strict time caps now.
Sounds protective, right? But here’s the kicker… FAPA doesn’t just apply to new cases. It’s retroactive. That means it can actually go back in time and impact old foreclosure cases that were filed under the previous rules.
📢 And That, Friends, Has Sparked a Legal Earthquake
Friedman Vartolo LLP swooped onto the scene July 1st filing an amicus curiae (friend of the court) brief on behalf of some heavy hitters in finance, including:
– New York Mortgage Bankers Association (NYMBA)
– American Institute of Servicing and Legal Executives (AISLE)
– American Bankers Association (ABA)
– Mortgage Bankers Association (MBA)
– New York Bankers Association (NYBA)
Their mission? Support U.S. Bank National Association’s petition in the case U.S. Bank v. Fox, and challenge the constitutionality of FAPA. 🎯
📉 Why the Backlash?
These groups say FAPA’s retroactive application throws the entire foreclosure process into legal chaos. We’re talkin’ confusion, unpredictability, and straight-up constitutional drama.
Michael DeRosa, a partner at Friedman Vartolo and co-author of the amicus brief, didn’t mince words: “The indefinite retroactive application of FAPA introduces significant uncertainty into New York’s mortgage foreclosure process.”
Translation? If rules can change the playbook after the game’s already begun, how do lenders, borrowers, or even courts operate safely and fairly? It’s not just a New York problem — it could dent investor confidence across the U.S. 😬📉
📜 Constitutional Cards on the Table
At the core of this motion is whether FAPA violates:
➡️ The Due Process Clause (aka you can’t just change rules mid-game without fair notice 😤)
➡️ The Takings Clause (as in, don’t mess with people’s property rights without proper justification 💼)
The legal eagles argue that FAPA’s retroactivity could infringe on these rights — hence, a full-blown constitutional concern.
🔥 Why You Should Pay Attention:
This isn’t just courtroom drama for legal nerds. If the Supreme Court decides to take the case, it could set a nationwide precedent on how retroactive laws impact real estate, lending practices, and — yes — your investment strategies.
“This is a case that sits at the intersection of state legislative reform, federal constitutional safeguards, and the national housing finance infrastructure,” said Zachary Gold, co-author of the brief and senior attorney at Friedman Vartolo.
Big talk. Big case. Big implications.
🌍 Real Talk: Why It Hits the Crypto & AI Arenas Too
We’re building tokenized real-world assets, revolutionizing homeownership models with DeFi rails, and deploying AI for smart lending — but when legal uncertainty clouds the legacy system, it makes onboarding the next gen of financial innovation that much harder 🧠🚀
Stability in traditional markets creates the foundation we need to innovate on top with AI agents and RWA tokenization 💡
👀 So What’s Next?
Will SCOTUS step in? Or will they ghost this plea? We’ll find out soon. But one thing’s for sure — the intersection of housing, regulation, and rights just got a lot spicier 🔥
📣 Stay tuned, fam. Because whether you’re flipping houses, staking real estate tokens, or building AI lending models, this one’s for the future of finance.
Innovation never sleeps 💼🔗💡
– Anita
