Legal League and ALFN Urge U.S. Supreme Court to Hear Landmark Mortgage Case Involving FAPA

In a significant move for the mortgage servicing and financial legal community, the Legal League and the American Legal & Financial Network (ALFN) have jointly filed an amicus curiae brief urging the U.S. Supreme Court to take up U.S. Bank v. Fox—a case with potentially sweeping implications for mortgage lenders and servicers nationwide.

The case centers around the controversial retroactive application of New York’s Foreclosure Abuse Prevention Act (FAPA), which rendered a mortgage held by U.S. Bank unenforceable. The New York Appellate Court’s decision stripped the bank of its rights under the loan, declaring it invalid based on FAPA’s retroactive provisions. Now, with the petition for certiorari filed, U.S. Bank is seeking Supreme Court intervention to reverse what it sees as an unconstitutional ruling.

A United Front: Legal and Industry Associations Rally Behind U.S. Bank

The joint amicus brief from Legal League and ALFN supports U.S. Bank’s argument that the retroactive application of FAPA violates the Takings and Due Process Clauses of the U.S. Constitution. Their brief presents a thorough argument, citing extensive industry research, legal precedent, survey responses from member firms, and public policy considerations. The filing asserts that FAPA’s retroactivity doesn’t just harm one lender it jeopardizes the stability of mortgage enforcement nationwide.

“This is about more than just one bank or one loan,” said Steven K. Eisenberg, Esq., Managing Shareholder at Stern & Eisenberg and one of the lead authors of the brief. “Retroactively stripping mortgage holders of their rights undermines the integrity of our legal system and threatens the entire foundation of property and contract law.”

Eisenberg was joined in drafting the brief by a team of experienced legal professionals, including Jessica Manis, shareholder at Stern & Eisenberg; Stephen M. Hladik, Esq., Chair of the Legal League Advisory Council and Principal at Hladik, Onorato & Federman LLP; David Rodstein and Natalie Grigg, Chair of ALFN and partner at Tromberg, Miller, Morris & Partners PLLC; and Blake Strautins, ALFN Corporate Treasurer from the Kluever Law Group.

The Constitutional Stakes

At the core of U.S. Bank’s petition is a fundamental legal question: Can a state retroactively apply legislation that deprives a property owner of rights they legally held when the mortgage was originated? According to the petition and the supporting brief, the answer must be no.

The Takings Clause protects individuals and institutions from government actions that effectively seize private property without just compensation. Similarly, the Due Process Clause guards against retroactive laws that unfairly disrupt settled legal expectations. The brief warns that FAPA’s reach threatens to do both creating a chilling effect on mortgage lending and disrupting the secondary mortgage market.

“These provisions, if allowed to stand, will not only erode confidence in property rights but also diminish access to credit and make it more difficult for consumers to secure affordable mortgages,” said Hladik.

Broad Industry Backing

The Legal League and ALFN are not alone in their concern. A separate amicus brief filed in support of U.S. Bank includes endorsements from the New York Bankers Association, Mortgage Bankers Association, American Bankers Association, American Institute of Servicing and Legal Executives, and USFN. Together, these organizations represent the backbone of the nation’s mortgage, banking, and legal industries amplifying the urgency of the appeal.

“The decision by the New York Court of Appeals to retroactively apply FAPA sets a dangerous precedent,” said Natalie Grigg. “This isn’t just a technicality it’s a foundational challenge to how contracts and property rights are treated under law.”

Looking Ahead

As the U.S. Supreme Court considers whether to take up the Fox case, legal professionals and mortgage servicers alike are watching closely. A ruling in favor of U.S. Bank could reset the boundaries for how far states can go in retroactively altering financial rights and obligations. Conversely, if the Court declines to hear the case, the implications of FAPA may ripple across state lines, prompting similar legislation and further litigation.

“We are hopeful that the Supreme Court recognizes the broad and lasting impact this case could have,” Eisenberg said. “It’s about protecting constitutional rights, preserving market stability, and ensuring fairness in how laws are applied.”

For now, all eyes remain on Washington, where a single decision could redefine the balance between state regulation and federal constitutional protections in the mortgage and lending sectors. For direct financing consultations or mortgage options for you visit 👉 Nadlan Capital Group.