I have a theory about Luther’s misunderstanding of justification, see if it makes any sense to you.
1st: Before the advent of Martin Luther, the Father of the Protestant Revolution, some very prominent and influential Catholics also said that justification was by faith alone.
Basil of Caesarea (329-379) “Let him who boasts boast in the Lord, that Christ has been made by God for us righteousness, wisdom, justification, redemption. This is perfect and pure boasting in God, when one is not proud on account of his own righteousness but knows that he is indeed unworthy of the true righteousness and is (or has been) justified solely by faith in Christ.”
Ambrose (c. 339-97) “Therefore let no one boast of his works, because no one can be justified by his works; but he who is just receives it as a gift, because he is justified by the washing of regeneration. It is faith, therefore, which delivers us by the blood of Christ, because blessed is he whose sins are forgiven, and to whom pardon is granted.”
Jerome (347-420) on Romans 10:3 “God justifies by faith alone.” (Deus ex sola fide justificat).
So, in my opinion, if these Church Fathers used the term “faith alone”, I conclude that there is a legitimate understanding of this term for Catholics.
2nd: How can it be by faith alone?
To put it bluntly, “Not the Protestant way.” Protestants deny that works before justification avail anything towards justification. But it is clear to me, from Scripture, that unless someone keeps the Commandments and does the Will of God, he will not be justified.
Romans 2:13 13 (For not the hearers of the law are just before God, but the doers of the law shall be justified.
This verse, very clearly tells me, that only those who do the Commandments will be just before God. Therefore, good works avail everything towards justification because without them, we won’t be justified.
3rd: So what did the Church Fathers mean when they said, “justification by faith alone”?
They were talking about that justification which occurs in the Sacraments. The Church teaches that the Sacraments are the works of God.
740 These “mighty works of God,” offered to believers in the sacraments of the Church, bear their fruit in the new life in Christ, according to the Spirit. (This will be the topic of Part Three.)
We approach the Sacraments with a disposition of faith. But it is apart from works. We repented, we turned to God, we sought His Face, we studied to show ourselves approved, now we believe that He will keep His promise. He will wash our souls with the washing of regeneration and renewal which is Baptism by water and the Holy Spirit. But we don’t do anything at that moment. We only believe. And God sees our faith and credits it to us as righteousness and that is why we are called the children of Abraham (Gen 15:6).
So, the justification which occurs in the Sacraments is what I believe the Catholic Church Fathers were talking about when they used the term “justification by faith alone”.
4th: So, what about Luther? In his German Bible, Luther swapped the words, “apart from works” for the word, “alone”. My theory is that he simply did not see the Sacramental Teaching which St. Paul was making when he wrote these words. I believe that when St. Paul said, “we are justified by faith apart from works”, he was describing that justification which occurs in Baptism. But Luther was led astray. And the prophecy of 2 Peter 3:16-17 was fulfilled in him:
2 Peter 3:16-17 Revised Standard Version Catholic Edition (RSVCE)
16 speaking of this as he (i.e. St. Paul) does in all his letters. There are some things in them hard to understand, which the ignorant and unstable twist to their own destruction, as they do the other scriptures. 17 You therefore, beloved, knowing this beforehand, beware lest you be carried away with the error of lawless men and lose your own stability.
Does that make sense?