TILA Rescission is Changing Foreclosure Defense

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At least one case in bankruptcy has been reopened because of the new Supreme Court ruling on TILA Rescission. Like many cases in and out of bankruptcy court, tens of thousands of homeowners sent notices of rescission to the apparent lender, servicer, trustee on deed of trust or others involved in the scheme of securitization. And many of them did it years ago during the three year statute of limitations starting with the date of “consummation.”

There appears to be some confusion arising out of what appears to be a splitting of legal hairs but in fact is just the reverse. TILA rescission is “effective” upon sending the notice — i.e., when it was dropped in the mailbox using the US Postal service. Lawyers and Judges appear to be dumbstruck by the US Supreme Court decision where Justice Scalia simply said that the statute is clear and no further interpretation is required. He said, for a unanimous court, that rescission was effective the date of the notice.

This is very challenging for lawyers who are used to arguments about due process which means an action in court. TILA rescission is an action out of court. NOTHING is required from the borrower other than a notice that he or she or they are cancelling the loan papers. There is no cause of action for TILA rescission because it is already done privately. That isn’t me talking that is the U.S. Congress in TILA and Justice Scalia for the US Supreme Court.

And the rest is simple: Within 20 days the “lender” must effectuate the return of the canceled note and the release of the borrower’s collateral (home) from the mortgage or deed of trust. Within that 20 days the “lender” or “Creditor” must also disgorge all money paid by borrower or to otherwise paid out at the time of the loan closing and any payments made thereafter, which would include monthly payments right up through the date of the last payment. This is not common law rescission.

By definition, any lawsuit filed by the borrower to ENFORCE the rescission — i.e., to get the note, satisfaction of mortgage and disgorgement of money — is NOT an action to EFFECTUATE rescission. The intent of the statute is crystal clear — that the borrower doesn’t need to be a lawyer or financier to cancel the deal. It is canceled by mailbox. No particular form is required.

If the lender MUST comply with the rescission (return canceled note, satisfy the mortgage and return the money) within 20 days, they cannot win by stonewalling and then recasting the Borrower’s lawsuit to ENFORCE the rescission that is already effective. The Banks don’t have the option of raising defenses when the Borrower files a lawsuit for enforcement. The Banks can ONLY file an action opposing the rescission within the 20 days from the date of rescission which is the date of the notice which is the date of mailing.

So what does all this mean? If you had a mortgage that had a loan “closing” date of June 1, 2006 and you sent a notice of rescission on October 2, 2008, there is absolutely no doubt now that the note and mortgage were voided by operation of law (meaning it is automatic without a lawsuit) as of October 2, 2008.

Everything else after rescission is VOID other than return of the canceled note, filing a satisfaction or release of the mortgage or deed of trust and disgorgement of the funds received paid to the borrower. The only possible way of stopping this is by the lender filing a lawsuit within the 20 days to contest the rescission. Any other interpretation would  go against the simple instructions in TILA and Scalia’s opinion — that the rescission is effective upon notice. Such an interpretation would mean that rescission is not really effective until a Judge rules on it. That is the opposite of what TILA says and the opposite of what the Supreme Court says TILA says.

If there was a judgment entered on the note or mortgage or there was a sale they are all VOID. The court lacked subject matter jurisdiction because there was no mortgage or note on the date the court entered its order or judgment.

The interesting thing is in bankruptcy. The discharge order was based upon the trustee’s abandonment of the property. The abandonment was based upon a misinterpretation of the courts in that jurisdiction.

Hence the schedules are wrong in hundreds of thousand of bankruptcies across this great land of ours. The borrower had an unencumbered asset (his home) thus changing the equation of assets and liabilities completely.

But everyone thought the home was encumbered despite the prior rescission because the rescission was considered not effective until a Judge ruled that it was effective — and until the Borrower tendered property or money to the lender. The US Supreme Court said that interpretation is wrong for two reasons, to wit: (a) that isn’t what the statute says and (b) the misinterpretation stems from using common law rescission theories which are not applicable.

The problem here is that orders entered during bankruptcy are considered adjudications in some cases and therefore it is necessary to reopen cases to set aside orders for which the court lacked jurisdiction over the subject matter.

This could get interesting.

34 Responses

  1. what about the deed trustee being an officer of lender

  2. what about rescission due to RESPA violations ,false late fees ,frivolous inspection fees

  3. david, there’s nothing wrong with lenders borrowing the funds they use to fund loans imo. Once they borrower it, they own it. They don’t use our credit. W/h lines go back to mud, darn near, so if there’ anything hinky about it, it isn’t new with sec’n (unless the investors’ funds were made into the w/h line). Their agreement will describe the loans – generically – that the lender-borrower may make if it wants a short term loan from the w/h lender. A warehouse loan is generally like a parking spot. The loan is parked there until the lender resells it or finds permanent financing. If a loan doesn’t meet the parameters and it’s found in a spot audit, it’ll get kicked, which is akin to what fnma and fhlmc were supposed to do after purchasing loans – kick them. They were to enforce the “buy-back” provisions in the seller-servicer’ agreements lenders entered with them if loans they had purchased didn’t qualify.

  4. david @1:25 – looks to me like someone is being replaced as the w/h lender for those companies or is otherwise taking over someone
    else’s position in an existing agreement. So, just say RFC, who bought non-conforming whole loans unless it started originating these itself and got me, owns some loans using a loc from ‘JMC’. “JMC” has security interests in those loans and it looks to me like GMAC is going to replace them. I’d have to read it five times and ponder it long and hard to suggest anything else. I don’t see anything else from my one read, but of what I do see, I see nothing untoward. I know one little tidbit about rfc, and that’s back in the day, their agreement to purchase a new loan was subject to a two mo. seasoning requirement (and they didn’t fund them). This reminds me of something else I’ve only heard. That only seasoned loans were eligible for securitization. I’ve heard from 6 to 12 mos.
    There was a company which caused a scandal in the 80’s when its marketing guy guessed wrong about which way the cost of money was going to go, long and short. He sat on loans rather than sell them. The co. found itself underwater on all the loans they’d made. Its warehouse lines were full, they couldn’t originate any new loans, and the w/h lenders were demanding payment of their contractually short term loans or nasty fees (or both).

  5. LOOK AT WHO IS BORROWERS.!!!!!!!!!!!!!!!!!!!!! ON THE
    WAREHOUSE PROMISSORY NOTE.

    This LOAN AGREEMENT (as amended or supplemented from time to time, this ” Agreement” ) dated as of June 4, 2008, is by and among Residential Funding Company, LLC, a Delaware limited liability company (” RFC” ), GMAC Mortgage, LLC, a Delaware limited liability company (” GMAC Mortgage” , and together with RFC, each a ” Borrower” and collectively, the ” Borrowers” ),

    Residential Capital, LLC and the other Affiliates of the Borrowers party hereto as Guarantors (each, a ” Guarantor” ), the various other parties signatory hereto as obligors (the ” Obligors” ), GMAC LLC, a Delaware limited liability company (the ” Initial Lender” ), the financial institutions and other Persons that are or may from time to time become parties hereto as Lenders (together with the Initial Lender and their respective successors and assigns, each a ” Lender” and collectively, the ” Lenders” ), and GMAC LLC, a Delaware limited liability company, as agent for the Lenders (in such capacity together with its successors and assigns in such capacity, the ” Lender Agent” ) and Wells Fargo Bank, N.A., solely with respect to Section 12.11(b) and in its capacity as First Priority Collateral Agent. BACKGROUND The Borrowers desire to obtain Commitments from the Lenders so that the Lenders will from time to time and subject to the terms hereof make revolving Loans to the Borrowers, which Loans are secured by the Collateral. The Guarantors have entered into this Agreement and have agreed to provide guarantees of the Obligations hereunder and to pledge Collateral to secure such guarantees. The Lenders have agreed to acquire certain outstanding term loans made to ResCap pursuant to that certain Term Loan Facility dated as of July 28, 2005 (the ” Term Loan Agreement” ) among ResCap, the lenders thereunder, Citibank, N.A., as syndication agent, the documentation agents thereunder, and JPMorgan Chase Bank, N.A., as administrative agent, from the lenders thereunder. The Borrowers, the Guarantors and the Lenders have agreed to convert the existing term loans referred to immediately above to Loans subject to the terms of this Agreement. The Lenders are willing, on the terms and subject to the conditions hereafter set forth, to extend the Commitments and make Revolving Loans to the Borrowers. NOW, THEREFORE, in consideration of the premises and the mutual agreements herein contained, and intending to be legally bound, the parties hereto agree as follows: ARTICLE I DEFINITIONS AND ACCOUNTING MATTERS Section 1.01. Definitions; Construction . (a) Capitalized terms used herein and not otherwise defined herein shall have the meanings specified in Schedule 1.01 .
    (b) All terms used in Article 9 of the UCC, and not specifically defined herein, are used herein as defined in such Article 9. (c) Unless otherwise stated in this Agreement, in the computation of a period of time from a specified date to a later specified date, the

  6. WHAT EVERYONE DOESN’T KNOW ABOUT THERE
    MORTGAGE AND NOTE. WAS THAT THE PRETENDER
    LENDER USED OUR MORTGAGE /NOTE,CREDIT SCORES
    ALSO ALL INFO GIVEN IN APPLICATIONS TO WHAT
    WE OWN,HAVE IN BANK ACCOUNT,ETC,ETC.

    TO GIVE THE WAREHOUSE LENDER A (WAREHOUSE NOTE )

    SO EVERYONE THAT TOOK OUT A MORTGAGE/NOTE, THE PRETENDER LENDER DIDN’T HAVE ANY MONEY AT TIME
    OF ORIGINATION. SO THEY TOOK ALL NOTES/MORTGAGES THAT WERE SIGN, AND THEY TOOK THEM TO WAREHOUSE LENDER
    AND MADE ONE LARGE ( PROMISSORY WAREHOUSE NOTE ) PAYED TO THE ORDER, OF THE WAREHOUSE LENDER.

    FOR THE PRETENDER LENDER TO BORROW MONEY AGAINST THAT PROMISSORY WAREHOUSE NOTE, USING OUR
    MORTGAGE/NOTE AS COLLATERAL.

    SO WERE IS ANY , TILA,RESPA, FEDERAL/STATE REQUIREMENTS ON DISCLOSURE ACTS THAT THE BORROWER
    KNOWS IS IS GIVEN THE PRETENDER LENDER PERMISSION TO USE HIS MORTGAGE AND NOTE TO BORROWER MONEY
    THAT NO ONE KNOW FOR SURE IT WILL BE USED FOR THE MORTGAGE/NOTE THE HOMEOWNER SIGN.

  7. Hi all,
    Most of you don’t know me but I have been in this since 2008. It’s been a while since I have posted on LL. I don’t recognize anyone except johngault. Long story short, I rescinded my loan in 2008 months before it was assigned to the foreclosing entity. The foreclosing entity filed for foreclosure and I filed a federal lawsuit to enforce the rescission. I won the federal case and obtained a judgment against the originator. The court stated that I had timely exercised a valid right of rescission and awarded me costs, actual and statutory damages. Over a year later, the state court entered a judgment of foreclosure. I appealed. At oral argument, the attorney for the foreclosing entity told the appellate panel that no court had ruled on the validity of the rescission. I pointed the court to the federal order and judgment. I lost the appeal. I don’t know why I lost since the court issued a PCA.

    I have been researching and writing about rescission for a many years now. I love the Jesinoski decision because it’s vindication for all the arguments I made along the way.

  8. now Owcen , is doing a swap around to hide all the fraud,.

    Ocwen to Sell $9.6 Billion of Servicing Rights to Green Tree
    Posted on March 18, 2015 | 1 Comment
    On a side note: Green Tree is part of the Walter Investment Management group. Green Tree’s sister companies are ditech, Security 1 Lending, and Reverse Mortgage Solutions.

    Ocwen Loan Servicing, a subsidiary of Ocwen Financial Corporation, and Green Tree Loan Servicing, for the sale by Ocwen of an Agency mortgage servicing rights portfolio with a total principal balance of $9.6 billion, according to an announcement from Ocwen on Wednesdaymorning.

    According to Ocwen, the portfolio consists of approximately 55,000 performing loans owned by Freddie Mac. The transaction is subject to approval by Freddie Mac and its conservator, the Federal Housing Finance Agency (FHFA), as well as other customary conditions. Ocwen reported that it expects the transaction to close by April 30, 2015, and expects the loan servicing to transfer in May 2015.

    “We are pleased with the progress we are making on executing our plan,” Ocwen CEO Ron Faris said. “Over the next several months, we expect to generate proceeds of at least $650 million from sales and transfers of mortgage servicing rights. We are also committed to ensuring a smooth and accurate transfer of information to the buyers of these mortgage servicing rights.”

  9. BANK OF AMERICA, N.A., AND THIRD-PARTY DEFENDANT, HOMEFOCUS SERVICES, LLC,
    Appellants,
    v.
    PHILLIP V. PATE AND BARBARA PATE, ROBERT L. POHLMAN AND MARCIA L. CROOM,
    Appellees.
    IN THE DISTRICT COURT OF APPEAL
    FIRST DISTRICT, STATE OF FLORIDA
    NOT FINAL UNTIL TIME EXPIRES TO FILE MOTION FOR REHEARING AND DISPOSITION THEREOF IF FILED
    CASE NO. 1D14-251

    In this civil foreclosure case, the trial court found that Appellant Bank of America (the Bank) engaged in egregious and intentional misconduct in Appellee Pates’ (Pate) purchase of a residential home. Thus, based on the trial court’s finding that the Bank had unclean hands in this equity action, it did not reversibly err in denying theforeclosure action and granting a deed in lieu of foreclosure. In addition, the trial court did not err in ruling in favor of the Pates in their counterclaims for breach of contract and fraud, and awarding them $250,000 in punitive damages and $60,443.29 in compensatory damages, against the Bank and its affiliate, Homefocus Services, LLC, which provided the flawed appraisal discussed below. Finally, the trial court did not reversibly err in granting injunctive relief and thereby ordering the Bank to take the necessary measures to correct the Pates’credit histories

  10. @ johngault,

    Not a “theory”; instead, it is now evidence of material fact: therefore, law.

    When the attorney that claimed to “handle” our closing died, I went to his office and collected his file on our house.

    The file was given us un-redacted.

    In the file, it shows the personal credit card of an employee of the lien-holding bank (the lien belonged to the people selling us the house), being used to “CASH ADVANCE” 9 months payments as installments on THE SELLERS HELOC just prior to closing, and, as such, a “refinance”.

    My wife and I never knew these fraudsters used our money to “square-up” their mortgage shortly before we closed on the house.

    So… an employee of the bank that owned a lien of $200,000.00 and insurance on a house that was gutted by a fire, used his personal credit card to provide “tertiary financing”.

    This same individual withheld from us the existence of the lien and the insurance, even as he masqueraded as an “employee” of the “Lender”.

  11. holy cow, michael keene. That’s quite an allegation. Where do these
    theories come from? If I got what you said, doesn’t that only work for them if they’re the same lender on the home one is buying or refinancing?

  12. These “people” are filth.

    I’m going to court this Friday.

    From personal experience here is what is going on:

    A rep, from the “lien-holding” bank, used his “personal credit card” to advance funds to the “loan” I was promised as a third party to the deal.

    TERTIARY FINANCING.

    Behind my back, these funds were used to restore a full balance to the loan they owed before my involvement with the subject property.

    The fraudsters took a “CASH ADVANCE” against the subject property as a “HELOC” lien.

    As a “HELOC”, that lien represents actual “CASH”, real money, taken against the subject property.

    Of course, no one told me they had taken that type of lien prior to their phony closing… and no one told me they had depleted the funds on that lien prior to closing…

    AND! NO ONE TOLD ME THEY HAD RESTORED THOSE FUNDS, TO THAT LIEN, PRIOR TO CLOSING!

    So… they farmed the equity; depleted the equity and then restored the equity in the subject property prior to closing….

    And THEY DID SO USING MY PROMISE TO CREATE ANOTHER MORTGAGE!

    In essence, “THEY REFINANCED THE LOAN THEY OWNED ON THE PROPERTY AS PART OF MY PROMISE TO BUY THE PROPERTY UNDER DIFFERENT TERMS ALTOGETHER”!!!

    Did I mention they did it behind my back??

    As such, the restoration of the balance of the loan they owed, prior to closing, is simply a refinance, using my funds…

    Hence, a TILA violation…

    Plant more acorns… We are gonna need more trees.

  13. Pretty bloody obvious – NOW

  14. Dyslexia attack sorry – that was a) they had no hope in hell of ME being able to pay it back ( because market was inflated)

  15. lauren so i ask myself is that any of my business.
    I signed a contract under an ideal that no one would ” loan” me money if i had a) they had no hope in hell of paying me back, ( and based on the infirmation and beliefbof the market i signed, yes it all looked dey convincing – at the time) b) i relied on that market value and so i signed, so i attacked the appraisal and a ton of other stuff, then things went kinda pear shaped lol. Long story.

  16. from Alina’s case: “because the Eastern District of Kentucky has already decided the validity and enforceability of its mortgage lien and the Plaintiff is precluded from re-litigating this issue again under the doctrine of res judicata”.
    The dc determined the validity and enforceability of the lien.
    No one in rescission is saying the loan isn’t valid or enforceable. In fact, they’re more likely saying that a v & enf contract exists (unless they use a disclaimer which neither admits nor denies). But in rescission, we’re saying something else, that we’re rescinding an otherwise valid contract for violations of tila.
    Those violations don’t make the loan invalid or unenforceable per se. They provide a vehicle to rescind. What did this guy in was that he’d already lost on his rescission. I don’t know about the rescission, but it sounded like he got the shaft in his deal, and maybe because he didn’t prove it wasn’t his signature (which he claimed) and because by rescinding (which was litigated in another court) he may have inadvertantly said it was his signature and or there was a valid contract to rescind. But I’ll say this, the dude was a fighter! Too bad he, like all of us, didn”t have the benefit of hindsight. He introduced Jesinoski late in the game as supplemental authority, but it wasn’t persuasive in the bk court. He needed to raise it in the older case but he couldn’t because it didn’t exist. But as the bk court said, it’s not an appeals court. I only wrote this stuff to draw attention to the fact that a ruling of valid and enforceable has no direct bearing on rescission., i.e. doesn’t preclude it because as I said, a determination of v & e imo only establishes a contract, the parties thereto, and their obligations to each other as stated in that contract. I see no reason why a borrower might be compelled to raise defenses of any kind to a contract in an action to determine those issues. If those things are established and the claimant is proper, I’d probably be like “great, now I’m rescinding”.
    strictly lay opinions

  17. Experts on Wall Street state that the industry standard is to sell the MBS “forward,” meaning that the security was sold and the money collected BEFORE the loan was funded on behalf of borrowers. Therefore, upon information and belief Plaintiff alleges that Countrywide misrepresented its role and is fraudulently posing as the alleged “lender” on Plaintiff’s loan documents.
    29. To corroborate that forward selling is the norm on Wall Street and lending credence to the CWALT MBS Trust as the provider of funds on Plaintiff’s loan as the true lender and not Countrywide Bank, the Federal Reserve Bank of New York Staff Report No. 468-August 2010” entitled “TBA Trading and Liquidity in the Agency MBS Market” by James Vickery Joshua Wright states the following:
    “A less widely recognized feature is the existence of a liquid forward market for trading agency MBS, out to a horizon of several months. The liquidity of this market raises MBS prices and improves market functioning. It also helps mortgage lenders manage risk, since it allows them to “lock in” sale prices for new loans as or even before those mortgages are originated. The vast majority of agency MBS trading occurs in this forward market, which is known as the TBA market (TBA stands for “to be announced”). In a TBA trade, the seller of MBS agrees on a sale price, but does not specify which particular securities will be delivered to the buyer on settlement day. Instead, only a few basic characteristics of the securities are agreed upon, such as the coupon rate and the face value of the bonds to be delivered. *3 In a forward contract, the security and cash payment for that security are not exchanged until after the date on which the terms of the trade are contractually agreed upon. The date the trade is agreed upon is called the “trade” date. The date the cash and securities change hands is called the “settlement” date.” (emphasis by Plaintiff)
    30. Further corroboration that the CWALT MBS Trust prefunded Plaintiff’s loan is provided in the CWALT prospectus supplement which states on page 4 that the CWALT Trust pre-funds loans as stated in the “Pre-Funded Amount”:
    “as of the date of this prospectus supplement, the pre-funded amount to be deposited in the pre-funding account is expected to be $137,761,260.00.” EXHIBIT H – prospectus
    31. In all securitized loans there is only one transaction – a loan from the investors to the homeowner. Without an investor there would be no loan; conversely without a borrower there would be no investor or investment, a premise corroborated in Re: Alabama No. 3:08cv1019-MHT (WO), US District Court, M.D., Eastern Division, February 17, 2009, Horace v. LaSalle Bank:
    “Horace is a third-party beneficiary of the pooling and servicing agreement … without such … plaintiff Horace and other mortgagors similarly situated would never have been able to obtain financing.” (Plaintiff’s emphasis)

  18. That does read right – i mean that median house price had outstripoed median income regarding ability to pay. Of course the appraisal was delicious, the end game was in place and it was nothing to do with ” home ownership”

  19. David,
    Thanks for the reply and best of luck to you. Did they tell you why they postponed until April and what state are you in? Also I don’t think you can count Sundays in the 20 days, so take that n account. So they would have until March 27

  20. So david and all, now you see wh the appraisals came in streched out to about twice the median income, economics do not lie.

  21. Alina great post and info… But
    In some cases as in mine, i appealed pursuant to rule 60b
    This gives judge a ” grande reservoir” to do justice, and re doctrine of res juducata It depends,

    Not a lawyer please do your own research and consult with a suitable attorney.

  22. Melissa, they postpone it until 21 april 2015, but as ng said the letters are post marked the 5 the of march 2015, and 20 days would be the 20th in a few days. we will see.

    jg, i agree , but it comes to a standing that prior to the closing , the pretender has sign a agreement with wh lender, to send your mortgage note to the wh lender, that’s what am saying. so no matter how you look at it, your mortgage and note was being sold to highest bidders before you sign your mortgage and note.

    when the note is sign by all party’s , it is sent by fax to who ever, and they send it to wh lender , and wh lender puts a security interest in it and perfects it as collateral. now you never knew who what were, and how much they were being payed to take your note, and give you the money 5 days later, after perfecting a interest in your home/property. without you having any knowledge of the fact that, someone you never herd, as being part of the contract, of is having a security interest in your home/property. so by the pretender lender giving them
    a commitment letter for your mortgage is what am saying. before you even sign mortgage and note. how i know this is i have a copy of my mortgage note assigned without recourse to this wh lender, by the pretender lender, sign and dated as of the closing date. same day.

    so were are all disclosure on that matter.???

  23. One of the reasons for the banksters to posit the sale and assignment to the trust is a current event is to defeat their own st of limitations, I can’t swear to this, but isn’t it generally that there’s a s of l for breach of contract claims on these contracts of around 6 years? If the trust owned the loan as of its closing date, then for a bunch of these loans, time’s up. The s of limitations begins to run on the date of the first missed payment. Regardless of what some court said, the continued default doesn’t renew the s of l. imo.

  24. david, fwiw, I’m with you on most of it, just not this:

    w/h lender had a security interest “PRIOR TO SIGNING A MORTGAGE AND MORTGAGE NOTE.”
    That’s just not a fact in evidence and or is not the case. The w/h lender’s security interest imo wouldn’t have attached before because that’s I think impossible, but it would at the creation of the note. Logically, there has to be something to have a security interest in and there isn’t anything until the note is executed. The funds provider and the w/h lender had a contract which prob said that in exchange for the funds, the w/h “would have” a sec interest in the note, but it didn’t exist til it did, til it was signed. That’s not to say that one’s info wasn’t used to get the lender funding before a loan was made to that borrower based on the borrower’s creds. Maybe that happened, but as to a sec interest, the note still had to exist for a sec interest to attach.

    Btw, I think if one rescinded but the lender didn’t perform, one only has one year to sqwauk about it. Not sure. can’t remember if we covered this.

  25. Judge Scalia decision on Notice of Rescission, was that a case? I would like to find and study it.

  26. David,
    Didn’t you just send out your Recession and have a sheriff sale canceled. Did the bank respond.

  27. so someone please explain this to me, and others. how could a borrower , have known of all the fraud until a foreclosure action is brought up?????? so if a borrower closed in 2005.2006,2007,2008,,etc etc, and now only have found out all the fraud in the mortgage/note.

    how could that borrower have known or should have known of all the facts. to go ahead and do a rescission????? as i would believe it statue would start at the moment the borrower relies that he has been defrauded against, by the banks ??

    and now has proof that the mortgage and note was sign over to real lender/warehouse lender, and the pretender lender assign said note to the warehouse lender as of the day of closing, and the ware house lender perfacted a security interest in your property. PRIOR TO SIGNING A MORTGAGE AND MORTGAGE NOTE. .SO why couldn’t a homeowner now rescind that contract, that he never had with that warehouse lender that took a security interest in your property with the knowledge and consent of the borrower????

    it was all fraud,

  28. Further comment for Neil.
    It would be up to the lender/plaintiff to reopen the foreclosure to withdraw the complaint. It is fraudulent on the part of plaintiff to ignore the rescission letter notice beyond the 20 day window if borrower defendant is damaged by the late failure to act by believing it is correct. I’m no lawyer but I believe all the requirement of fraud exist as the statute is “clear”. A double whamee!!

  29. @Alina
    This is not a re-litigation. The court lacked subject matter jurisdiction The mortgage, the note and any ruling by the bankruptcy court is VOID. SCOTUS ruled en banc that the TILA “statute is clear and no further interpretation is required” and “that rescission was effective the date of the notice.” The action ball is in the lender’s court not the bankruptcy court.

  30. I hate to throw a damper on this but the bankruptcy Court for the Eastern District of Kentucky recently ruled that res judicata bars the re-litigation of the validity and enforceability of the mortgage documents. To be fair, the debtor was involved in several lawsuits and argued that the validity of the mortgage documents had never been fully litigated and that some of the district court judgments were not final judgments. The day before the hearing, the debtor’s counsel filed a Notice of Supplemental Authority and attached the Jesinoski case. Additionally, at the hearing, the debtor’s attorney and the bank’s attorney agreed that the validity of rescission was addressed by the district court in one of the cases (not a smart thing for the debtor’s attorney to do especially when the pleadings said otherwise).

    The bankruptcy court went through each element of res judicata and determined that all four elements had been met and therefore the doctrine of res judicata prevented the debtor from re-litigating the effectiveness of the rescission.

    The case is In Re: Haffey – https://scholar.google.com/scholar_case?case=13063384031262953525&q=%22truth+in+lending%22+jesinoski&hl=en&as_sdt=6,44&as_ylo=2015

  31. Lauren its more complex than that
    First read the case

    It is further stated in JESINOSKI ET UX. v. COUNTRYWIDE HOME LOANS, INC., ET AL.

    “Congress passed the Truth in Lending Act, 82 Stat. 146, as amended, to help consumers “avoid the uninformed use of credit, and to protect the consumer against inaccurate and unfair credit billing.” 15 U. S. C. §1601(a). To this end, the Act grants borrowers the right to rescind a loan “until midnight of the third business day following the consummation of the transaction or the delivery of the [disclosures required by the Act], whichever is later, by notifying the creditor, in accordance with regulations of the [Federal Reserve] Board, of his intention to do so.” §1635(a) (2006 ed.).* This regime grants borrowers an unconditional right to rescind for three days, after which they may rescind only if the lender failed to satisfy the Act’s disclosure requirements. But this conditional right to rescind does not last forever. Even if a lender never makes the required disclosures, the “right of rescission shall expire three years after the date of consummation of the transaction or upon the sale of the property, whichever comes first.” §1635(f).”

    You have a right to rescind if the lender failed to satisfy the Act’s disclosure requirements until three years after the date of consummation of the transaction or upon the sale of the property, whichever came first.

    Then see link
    https://consumercomplianceoutlook.org/2010/second-quarter/right-of-rescission/

    Consult a lawyer in your State if you can

  32. you know, i even cited my notice of rescission in my lis pendens ( wrongfully / by mistake was ” exponged ” and title quieted – in Federal court) the appellate court now must consider the whole administrative record ( which they should anyway, but now especially because of the public interest ) because of this sipreme court ruling my case (s) now have taken a turn i believe, we shall, of course have to wait and see, i petitioned for en banc reconsideration, my appellate case is coming up 3 years yes 3 years almost. Check the rules for yourself they will show you the way, research for yourself its best to seek great council.
    Not a lawyer just sharing what may help others.
    What sickens me is this should have been over long ago.
    Onward.

  33. I don’t understand the reasoning behind refinanced mortgage only. But I don’t understand the whole idea regarding rescission anyway, so I Will not be using it. Seems like a 999-1 longshot to me.

  34. i understand that there are many requirements to fulfill before a rescission is effected: #1: must be a refi with a NEW lender #2: must be primary residence. i sent a rescission on a home equity line of credit within 3 years – denied; i sent a notice of rescission on a refi primary residence, but it was with same lender – denied; i sent letter of rescission on property owned by my brother and i which i moved into as primary residence within 2 months of closing but loan was second home for brother, with him ONLY on note but myself listed as BORROWER on mortgage and all other closing docs which i signed and we co-owned, again denied.

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