Beach v Ocwen: 1997 Decision that will be used by banks and servicers against rescission

For Further information and assistance please call 954-495-9867 and 520-405-1688.

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See Beach v Ocwen Fla. Supreme Court

I have no doubt that the Banks will attempt to use this decision — but it still is trumped by Jesinowski and other Federal decisions on equitable tolling. Having the right to cancel/rescind is described as extinguished by TILA regardless of the circumstances — including the absence of any enforceable loan contract.
This decision (1998) was rendered far before the idea of securitization was introduced into mortgage litigation. The interpretation of the extinguishment of the underlying right made sense in the context of loans from Bank A to Borrower B. In the era of securitization you have all kinds of questions — like when the transaction was “commenced”. The courts say it is when the “liability” arose. I agree — if we are saying that the consummation of the transaction begins when the lender loans money to the borrower. But in most cases we see that the lender did not loan money to the borrower and that is corroborated by the absence of anypurchase transaction, for value, when the alleged loan is “transferred.” There is no reasonable business explanation of why anyone would release an asset worth hundreds of thousands of dollars without receiving payment — unless it wasn’t an asset of the “seller” in the first place.The presumption is that TILA rescission rights run from the date the liability arose from the Borrower to the Lender. If the Lender was not properly disclosed, then one of two things are true: (1) there is no loan contract which means a nullification and quiet title action is appropriate or (2) until the real lender was disclosed, the transaction was not consummated. That might mean that both the three day rescission and the three year rescission are in play. If the position of the foreclosing party is that a REMIC Trust was finally disclosed to the borrower — and that the Trust was the lender, then disclosure is complete. But that isn’t what happened.

The ultimate decision here is going to be on the question of whether there is in fact a loan contract, and, if so, who were the parties to it? If there was no contract, it is the same as rescission by operation of law. No new rights arise on assignment or even sale of the loan from a pretender lender — unless the purchase was in good faith FOR VALUE and occurred without notice of borrower’s defenses and NOT when the loan was already in “default.” This narrow exception arises under the UCC for a Holder in Due Course to be Protected if they meet the narrow criteria stated in the UCC, article 3, and the narrow enforcement criteria for the mortgage expressed in Article 9.

The so called default is another hidden issue. If someone “acquires” the note and mortgage where the Borrower has already not paid or stopped paying on the alleged loan, then (1) it isn’t negotiable paper and (2) it provides notice that the borrower might not be paying because they don’t owe the party or successor on the note and mortgage (and never did).
When the mortgage crisis began, the banks and servicers were claiming that there were no Trusts and that they could file suit or initiate non-judicial foreclosure without any reference to trusts. That was why forensic audits were initially required — when we thought that REMIC Trusts were the true players. Banks and servicers argued convincingly in court that the Trust was irrelevant. Now in most cases (with some notable CitiMortgage, Chase and BOA exceptions) the Plaintiff or beneficiary is identified as a Trustee, bank or servicer (US Bank usually is the Trustee these days) on behalf of a REMIC Trust. They are now saying that they have the right to be in court or initiate foreclosure because (1) the Trust received an assignment and endorsement of the note and mortgage (2) the servicer has a right to represent and even testify for the the Trustee on the basis of the rights set forth in the Pooling and Servicing Agreement or by virtue of Powers of Attorney that magically appear at trial.
So the banks, servicers and their attorneys are side-stepping the issue of consummation of the transaction. They are withholding the information where the right of rescission would first become apparent to the borrower. When they withhold the information longer than 3 years from the date of the purported “loan closing”, they claim the right of rescission has expired. That is cynical and circular reasoning. That “closing” may be the point in time that the borrower’s “liability” arose, but the liability did NOT arise with the creditor being the party named on the note, mortgage and required disclosure documents.
Instead, the Payee was a naked nominee regardless of whether the “lender” was a thinly capitalized mortgage broker or a 150 year old bank.
Neither one loaned the money. In both cases there were using money essentially stolen from clueless investors on Wall Street who advanced money for the purchase of shares (mortgage backed securities) issued by an unregistered Trust that existed only on paper, had no bank account, and never received the proceeds of the shares that were supposedly sold to pension funds and other “investors” (actually victims of a fraudulent scheme).
The real answer is, as I have repeatedly said, that there was no loan contract and therefore the note and mortgage were induced to sign by both fraud in the inducement and fraud in the execution.  But the courts may turn to a foggier notion that the disclosures were intentionally withheld and that this entitles the borrower to equitable tolling of the 3 day or three year statute of limitations. It seems highly doubtful that the US Supreme Court will reverse itself.
If they deny equitable tolling by allowing stonewalling from the Banks then no new Bank would be able to enter the picture which is the whole purpose of the TILA rescission. While courts might find the argument from the banks and servicers as appealing, history shows that the US Supreme Court is just as likely to effectively reverse thousands of decisions based upon the wrong premise that rules and doctrines for common law rescission can be applied to TILA rescission.
Yet my point goes further. The express wording of the TILA rescission as affirmed by a unanimous Supreme court in Jesinowski is that the rescission is effective by operation of law when it is dropped in the mailbox — and that there is nothing else required by the borrower. If the “lender” wants to challenge that rescission it must do so before the 20 day deadline for compliance — return of canceled note, satisfaction of mortgage and disgorgement of all money paid. This makes it very clear that stonewalling or bringing up defenses later when the borrower seeks to enforce the rescission is not permissible. The idea behind TILA rescission has been to allow a borrower to cancel one transaction and replace it with another — which means that title is clear for a new lender to offer a first or second mortgage free from claims of the prior pretender lender.
Thus the expected defense from the banks and servicersis going to be that the rescission was void ab initio because of the statute of limitations or some other reason. But these are affirmative defenseswhich is to say they are pleas for affirmative relief in a formal pleading with a court of competent jurisdiction. That court does not have any jurisdiction or discretion to find that the rescission was void ab initio if more than 20 days has expired after the notice of cancellation or rescission was made.Thus procedurally, the express wording of TILA and Jesinowski totally bars the banks and servicers from raising any defenses to the effectiveness of the rescission after 20 days from the date of notice of rescission. To interpret it any other way is to overrule Justice Scalia in Jesinowski. It would mean that the banks and servicers and Trustees could later bring up defenses to the rescission which would completely bar the ability of the borrower to apply for a substitute loan. No lender is going to offer a mortgage loan where they are taking on the risk that they are not getting the lien priority that is required to assure payment and collateral protection.

And the reason why there is no qualifying creditor to bring the action within 20 days will be taken up in an upcoming article “What if a Broker Sold an IPO and Kept the Proceeds? — The True Explanation of Securitization Fail.” Also see Adam Levitin on that.

39 Responses

  1. Rock
    How about how deutsche came to get interest and the title to the property

  2. That april 8th decision in Macklin is a stinking tome. But for anyone interested and having the energy, make sure to see why the court ruled it had jurisdiction, etc.

  3. For the legal illiterates who want to learn, you had better read the In re Macklin case I provided. This is what happens when you listen to Garfield and the other “charlatans” like Macklin–you lose your home.

    “Macklin attempts to argue that under Jesinoski and Merritt that the recession was valid and thus the security interest is void. As such, Macklin argues that DBNTC has no interest and thus the court has no subject-matter jurisdiction. This is INCORRECT, and DBNTC can defend its rights and interests against Macklin’s claims, including asserting that it held the title to the Property. Further, this federal court had and has subject matter jurisdiction.” In re JAMES L. MACKLIN, Case No. 10-44610-5-7, Adv. Proc. No. 11-2024, Docket Control No. JLM-1. United States Bankruptcy Court, E.D. California. April 8, 2015.

    If anyone other than a crackpot has a legitimate question, I will answer it; other than that I won’t waste anymore of my time.

  4. The Act contemplates various situations in which the question of a lender’s compliance with the Act’s disclosure requirements may arise in alawsuit—for example, a lender’s foreclosure action in which the borrower raises inadequate disclosure as anaffirmative defense. Section 1635(g) makes clear that acourt may not only award rescission and thereby relievethe borrower of his financial obligation to the lender, but may also grant any of the remedies available under §1640 (including statutory damages). It has no bearing upon whether and how borrower-rescission under §1635(a) may occur.
    Finally, respondents invoke the common law. It is true that rescission traditionally required either that the rescinding party return what he received before a rescissioncould be effected (rescission at law), or else that a court affirmatively decree rescission (rescission in equity). 2 D. Dobbs, Law of Remedies §9.3(3), pp. 585–586 (2d ed. 1993). It is also true that the Act disclaims the common-law condition precedent to rescission at law that the borrower tender the proceeds received under the transaction. 15 U. S. C. §1635(b). But the negation of rescission-atlaw’s tender requirement hardly implies that the Act codifies rescission in equity. Nothing in our jurisprudence,and no tool of statutory interpretation, requires that a congressional Act must be construed as implementing itsclosest common-law analogue. Cf. Astoria Fed. Sav. & Loan Assn. v. Solimino, 501 U. S. 104, 108–109 (1991). The clear import of §1635(a) is that a borrower need onlyprovide written notice to a lender in order to exercise his right to rescind. To the extent §1635(b) alters the traditional process for unwinding such a unilaterally rescinded transaction, this is simply a case in which statutory lawmodifies common-law practice.
    * * * The Jesinoskis mailed respondents written notice oftheir intention to rescind within three years of their loan’s consummation. Because this is all that a borrower must do in order to exercise his right to rescind under the Act,the court below erred in dismissing the complaint. Accordingly, we reverse the judgment of the Eighth Circuit andremand the case for further proceedings consistent with this opinion.
    It is so ordered. THE SUPREME COURT OF THE UNITED STATES OF AMERICA.

  5. Right Christine tender is a great topic for discussion , now your contributing to discussion, instead of pickin on mr Neil lol oh yeah and just about everybody,

    Actually I rescinded first, and I was ready and able to tender, but the burden is on them, that’s the beauty of the Supreme Court decision, unanimous, no if ands or buts, because, I give them the oppertunity to tell the court who is who and how, and what the balance is so I can then get payoff amount to get a refi or hard money loan or whatever, ITs none in their business unless they file within 20 days,tHATs how it reads, and was clarified once and for all, 3 days to 3 years, they had 20 days. I have the right because I believe the WRITING, and one thing I know, is the contest I have with the party im rescinding to Is that it REACHES the true creditor being the guy who stands to take a loss, and I believe that’s why they never filed in court for declaratory relief, that’s all they had to do to save me from this ongoing litigation, but because they pulled off that curtesy of presumption of the evidence they submitted, why worry about rescission issue , well, God is good and The Jesinoski v countrywide Supreme Court decision is the bomb, bless the jesinoskis and their council for staying the course but only time will tell and how skillfully it is used from here on. Thing is there will be particularities to every case and how the ruling applies, or not , in my case heck yes it applies and I’m jazzed.

  6. Deb,

    One last point before I retire for the night:

    Homeowner lives in the house, stops paying his mortgage, does his homework, finds grounds for rescission and sends a valid rescission letter. “valid” is extremely important. Read the statute. NG doesn’t emphasize that enough: not profitable for him to have smart Cult followers: it adversely impacts on his bottom line. I posted it. I can repost it.

    Bank ignores the rescission letter and homeowner is compelled to file suit to enforce his valid demand. If the rescission letter was valid and bank figures it will lose at trial, bank will absolutely want to negotiate out: that’s what they do when held by the short hair.

    Then, it is UP TO HOMEOWNER to negotiate an amount much larger than the original loan, in order to assure that he will be able to TENDER (If you get there, put that into a trust so that it doesn’t get spent, just in case the true HDC comes alive and attacks), inclusive of his attorney fees and damages plus any tax liability (banks report every judgment as a loss. 1099c. Up to you to fight the IRS. Compute a tax attorney as part of the damages).

    Rescission after foreclosure? Better make sure you have solid evidence of financial, economic, emotional and physical damages. Uphill battle. NG won’t tell you. And the house is not coming back to you. Ever. Nor do you want it back: you don’t know what shape it’s in and you probably won’t be compensated enough to bring it back up to code anyway.

    Can you do it pro se? Probably not. Compute the cost of a solid attorney and find one who knows how the game is played. Ask me for one if you get there.

    I know the legal game and i know how it’s played. I’ve played it for 30 years.

  7. Deb,

    As much as I really like you as a person and I know your heart is in the right place, Scalia only said that one does not have to file suit in order to obtain legally justified rescission. He said NOTHING more.

    It still comes down to taking the horse to water. The only thing Scalia’s ruling will allow is this:

    Suppose Homeowner A studied his file and decided that yes, indeed, he has valid, legal grounds for rescission and he sent a timely rescission letter. Suppose Bank B (alleged mortgage holder) either ignores or denies the rescission. Suppose that because Bank B failed to act on that rescission, Homeowner A is compelled to incur legal expenses in order to enforce his rights to rescission. Suppose Bank B was wrong not to act upon the demand or to deny it:

    All Scalia gives homeowner grounds for is to:
    1) Recover all of his legal expenses if, indeed, it is found that Bank B acted in bad faith;
    2) Possibly recover damages (emotional and otherwise) for being forced to sue in order to enforce the valid rescission.

    A few thousand bucks. You get your money back for what you paid your attorney. You get a few thousands for your emotional pain and suffering. It doesn’t give you the house. Why?

    What Scalia did NOT do is change the condition inherent to rescission: TENDER. Scalia does not now, nor did he ever, have the authority to CHANGE the TILA statute. He can only apply it.

    To homeowner: “You want the house? You want to negate the contract? You borrowed $250,000 to move in? DO YOU HAVE IT TO GIVE IT BACK so that you can stay in it?”

    To Bank: “Homeowner wants out and can demand it, based on his file. Give back everything homeowner paid to you as closing costs, interest, appraiser’s fees and such. The contract never existed, you’re both out of it. If you know the party who brought the $250,000, bring it in and the house is his if homeowner’s tender doesn’t take place.”

    Why is that so hard to understand? Is it for the same reason old timers got willingly taken by so many “American-Greed” con artists? Listen to them: “25% sounded too good to be true (common sense trying to kick in) but… (common sense out the window) my neighbors were making out like bandits (implied: I knew from education, experience and common sense it didn’t sound right. I still decided to try it… just in case and because I didn’t want to be left out of a fishy golden opportunity just in case the Joneses made money and I didn’t.)

    Deb, no one can have it both ways. No one. Not even banks. It will catch up with everyone. Is your life happening today or “when the bankers, attorneys and judges hang”?

    Use common sense. Otherwise, there is no point is trying to educate LL Cult members.

    Hell, they may have to lose everything until they smarten up. Just like American Greed willful victims…

  8. Omg ” orioles” what the he** I think I have a prob in my computer
    Forgive me ok🙏

  9. Oops – that was ” how long it takes NOT rakes, but they did step on one, according to the U.S. Supreme Court re rescission.

  10. I have to say this, a fair exchange is no robbery, I got audits, i paid a reasonable sum, time was spent preparing them and in good conscience I think overall, so I found out a few things as a consequence, but never got the oppertunity ( yet) to have the opinion admitted into evidence. When people ask for the wins its ridiculous, it takes many years and that is part of the Orioles, courts have never had such a mess in front of them – the U.S. supreme court decision shows this, do you understand how long it rates to get your case to that level.

  11. You know life’s too short to worry about what other peeps nitwits and nincompoops do, not your problem Christine I hate to tell you.

  12. aND I’m not whining about it.so, that is that.

  13. And no matter what the situation, there will always be some parasite cashing in on people’s distress and misery. As long as there’s life, there’s a hosts and parasites: it’s a law of nature. Roaches, fleas, taenias and ascariasis, lice, Garfields: they come in all shape and form. And they always find their host.

    Just like this one:

    http://www.dailyfinance.com/2015/04/16/business-funds-divorce-proceedings/

    Know why? This society manufactures suckers as fast as it manufactures crooks. Just a question of choosing where one belongs. Or avoiding both, to preserve one’s sanity…

  14. aND I will blog here if I want, but I will not be buying anyone’s ” package” been there done that.

  15. Come on Christine
    Anyone who beats them on this rescission issue (I mean now known as absolute primary law because the US Supreme Court said so) will be settled with and a darn gag clause. IT might be worth it to them, think about that.

  16. sC no
    Only if they don’t respond by filing on their end , 20 days
    They absolutely should know how it works.

  17. “Beach v Ocwen: 1997 Decision that will be used by banks and servicers against rescission”

    Oh no! That’s too old. All banks will need to do is wait a few months to use all the brand new frivolous rescission cases guarantied to be filed by people who come here to get their legal advice and unethical (or incompetent) attorneys who come here for inspiration. And given the interest showed by The Cult and its members, we can easily predict a slew of 2015 cases banks will just have to choose from and which will delay any reversal in the foreclosure landscape… There is no better case than one where the attorney gets fined, brought on contempt charges or some kind of similar example. Makes banks’ job so much easier!

    That’s quite alright: Garfield is making out like a bandit selling all kinds of defense packages. And it is, after all, Garfield’s website: he invested in it. If people are too dense to see how deeply they are being suckered in, it’s not his responsibility.

  18. Did you know the sellers of an IPO never has to payback the principal to the shareholders?

    What a racket!!

  19. Not quite Deb. .
    Rescinding the contract is voiding it.
    Enforcing it is just that…. Enforcing it.

    E Tolled….lay off the hard stuff …
    You obviously aren’t getting the desired results from drinking Kool-aid.

  20. Hey NPV, your mind subconsciously filled in the blanks….Rock didn’t write what your brain told you he wrote. He actually wrote, “I’m tired of all the niwittery….”

    Now, nitwittery is an accepted word, meaning a stupid or silly person. On the other hand, niwittery is simply a non-existent phrase used by a stupid or silly person. See the difference?

    Rock and Christine must be doing the Niwittery Tag Team duo here, so that when Rock is tired of being the resident bankster apologist, he tags Christine to do the dirty. She must be pulling niwittery night shift this evening.

    But it’s all so confusing, as Rock has tired of all of the niwittery on this blog now at least ten or twelve times, condemning all here to a life without his companionship and frivolity (read: niwittery), bidding us all adieu many times before. I fear that maybe his word isn’t his bond and that he can’t be trusted, just like his bankster bud’s bonds aren’t worth the paper they’re written on and their trusts are empty pokes. Niwittery Pokes. Come to think of it, I’d like to poke him in the eye. Trust me.

  21. Neil wrote

    And the reason why there is no qualifying creditor to bring the action within 20 days will be taken up in an upcoming article “What if a Broker Sold an IPO and Kept the Proceeds? — The True Explanation of Securitization Fail.” Also see Adam Levitin on that.”

    So, In essence isn’t rescission effectively enforcing the contract ?
    It says basically if you party person say you are the beneficiary then you are out xxxxxx dollars , but because I believe you are the servicer and you stated a different party was the owner and investor and that I must not contact them then how do I kniw what I am liable for or even owe you my collateral hime under the contract I thought I signec, and so, i rescind the nite and deed of trust ( within 3 yrs of signing) I am ready and willing to tender – to the true creditor, minus equitible setoffs, all things being equal, ( ha) why are they so adamant that rescission doesnt apply. I expect a fight, so what’s new.

  22. Long Live Neil Garfield Defender of Human Rights, Due Diligence

    NEVER AGAIN

  23. Sc
    I’m definitely no expert here but “reverse mortgage” translates in my mind as ” distressed debt” as follows I wonder if that was how inflated home price translated much the same, hence the rise and fall of the bubble market.

  24. Did you know that in reverse mortgages you could still lose the house in a foreclosure if you don’t maintain insure occupy and pay re taxes?

    Do you know why they made the lenders stop requiring the settlers to purchase annuity in reverse mortgages?

    Did you know why reverse mortgages are irrevocable?

    Sorry About all this reverse accounting stuff but it seems to be on my mind again…. We keep getting swamped with mail wanting us to apply for a reverse mortgage.

    We are not 62 and to the best of my knowledge and their advertisements that age has not changed yet.

  25. Lol glad you like my word SC
    Good luck with your case

  26. Enforce the Contract!
    Don’t fight them …

    N is for Neil and Nincompoop.

    Scratch!

  27. And nincompoopery NPV,
    ( love that word “nincompoop” my uncle col taught me the word when I was about 5 ) it applies to all of us at times, I bear witness reading the good the bad and the just plain ugly on here fir a very very long time. In gratitude to all.

  28. DB Thanks for posting USEFUL info.

  29. nitwittery, lol

  30. Rock is that you Maher Suleiman

  31. Christine, you answer it. I’ve got better things to do like saving homeowners their homes. I’m tired of all the niwittery anyway.

  32. HERE ROCK,CHRISTENE,

    How to Recind a Mortgage
    The following information pertains to the right to recind an agreement between HSBC and a customer. It is quite lengthy, but very interesting. The information comes from the FTC and OCC, respectively, according to the submitter. Case law is included:

    I. TILA & Res Judicata
    (Analogous to Mr. Curtis xxxxxx , situation since he had never litigated fully or raised any TILA claims affirmatively or defensively) A rescission action may not be barred by prior or subsequent TIL litigation which did not involve rescission (Smith v. Wells Fargo Credit Corp., 713 F. Supp. 354 (D. Ariz. 1989) (state court action involving, inter alia TIL disclosure violations did not bar a subsequent action based on rescission notice violations in conjunction with same transaction which were not alleged or litigated in prior action) (See also In re Laubach, 77 B.R. 483 (Bankr. E.D. Pa. 1987) (doctrine of merger bars raising state and federal law claims arising from a transaction on which a previous successful federal TILA action was based; merger does not bar, however, rescission-based on the same transaction)).

    The Truth-in-Lending law empower Mr. Curtis xxxxxxx , to exercise his right in writing by notifying creditors of his cancellation by mail to rescind the mortgage loan transactions per (Reg. Z 226.15(a)(2), 226.23(a)(2), Official Staff Commentary 226.23(a)(2)-1) and 15 U.S.C. 1635(b).

    2. Security Interest is Void
    The statute and regulation specify that the security interest, promissory note or lien arising by operation of law on the property becomes automatically void. (15 U.S.C. 1635(b); Reg. Z 226.15(d)(1), 226.23(d)(1). As noted by the Official Staff Commentary, the creditor’s interest in the property is “automatically negated regardless of its status and whether or not it was recorded or perfected.” (Official Staff Commentary 226.15(d)(1)-1, 226.23(d)(1)-1.). Also, the security interest is void and of no legal effect irrespective of whether the creditor makes any affirmative response to the notice. Also, strict construction of Regulation Z would dictate that the voiding be considered absolute and not subject to judicial modification. This requires HSBC Mortgage Services to submit canceling documents creating the security interest and filing release or termination statements in the public record. (Official Staff Commentary 226.15(d)(2)-3, 226.23(d)(2)-

    3. Extended Right of Rescission
    The statute and Regulation Z make it clear that, if Mr. Curtis xxxxxxx , has the extended right and chooses to exercise it, the security interest and obligation to pay charges are automatically voided. (Cf. Semar v. Platte Valley Fed. Sav. & Loan Ass’n, 791 F.2d 699, 704-05 (9th Cir. 1986) (courts do not have equitable discretion to alter substantive provisions of TILA, so cases on equitable modification are irrelevant). The statute, section 1635(b) states: “When an obligor exercises his right to cancel, any security interest given by the obligor becomes void upon such rescission”. Also, it is clear from the statutory language that the court’s modification authority extends only to the procedures specified by section 1625(b).

    The voiding of the security interest is not a procedure, in the sense of a step to be followed or an action to be taken. The statute makes no distinction between the right to rescind in three day or extended in three years for federal and four years under Mass. TILA, as neither cases nor statute give courts equitable discretion to alter TILA’s substantive provisions. Since the rescission process was intended to be self-enforcing, failure to comply with the rescission obligations subjects Hsbc Mortgage Services Inc. to potential liability

    Non-compliance is a violation of the act which gives rise to a claim for actual and statutory damages under 15 USC 1640. TIL rescission does not only cancel a security interest in the property but it also cancels any liability for the Mr. Curtis xxxxxxxx , to pay finance and other charges, including accrued interest, points, broker fees, closing costs and that the lender must refund to Mr. Curtis xxxxxxxx , all finance charges and fees paid.

    In case HSBC Mortgage Services Inc. do not respond to this default letter, Mr. Curtis xxxxxxxx, has the option of enforcing the rescission right in the federal, bankruptcy or state court (See S. Rep. No. 368, 96th Cong. 2 Sess. 28 at 32 reprinted in 1980 U.S.C.A.N. 236, 268 (“The bill also makes explicit that a consumer may institute suit under section 130 [15 U.S.C., 1640] to enforce the right of rescission and recover costs and attorney fees”).

    TIL rescission does not only cancel a security interest in the property but it also cancels any liability for Mr. Curtis xxxxxxxx , to pay finance and other charges, including accrued interest, points, broker fees, closing costs and the lender must refund to Mr. Curtis E Frazier , all finance charges and fees paid. Thus,HSBC Mortgage Services Inc. are obligated to return those charges to Mr. Curtis xxxxxxxx , (Pulphus v. Sullivan, 2003 WL 1964333, at *17 (N.D. Apr. 28, 2003) (citing lender’s duty to return consumer’s money as reason for allowing rescission of refinanced loan); McIntosh v. Irwing Union Bank & Trust Co., 215 F.R.D. 26 (D. Mass. 2003) (citing borrower’s right to be reimbursed for prepayment penalty as reason for allowing rescission of paid-off loan).

    4. Step One of Rescission

    First, by operation of law, the security interest and promissory note automatically becomes void and the consumer is relieved of any obligation to pay any finance or other charges (15 USC 1635(b); Reg. Z-226.15(d)(1),226.23(d)(1). . See Official Staff Commentary 226.23(d)(2)-1. (See Willis v. Friedman, Clearinghouse No. 54,564 (Md. Ct. Spec. App. May 2, 2002) (Once the right to rescind is exercised, the security interest in the Mr. Curtis E Frazier’s property becomes void ab initio). Thus, the security interest is void and of no legal effect irrespective of whether the creditor makes any affirmative response to the notice. (See Family Financial Services v. Spencer, 677 A.2d 479 (Conn. App. 1996) (all that is required is notification of the intent to rescind, and the agreement is automatically rescinded).

    It is clear from the statutory language that the court’s modification authority extends only to the procedures specified by section 1635(b). The voiding of the security interest is not a procedure, in the sense of a step to be followed or an action to be taken. The statute makes no distinction between the right to rescind in 3-day or extended as neither cases nor statute give courts equitable discretion to alter TILA’s substantive provisions. Also, after the security interest is voided, secured creditor becomes unsecured.

    5. Step Two of Rescission

    Second, since Mr. Curtis xxxxxxxxx has legally rescinded the loans transaction, the mortgage holders (HSBC Mortgage Services Inc.) must return any money, including that which may have been passed on to a third party, such as a broker or an appraiser and to take any action necessary to reflect the termination of the security interest within 20 calendar days of receiving the rescission notice which has expired. The creditor’s other task is to take any necessary or appropriate action to reflect the fact that the security interest was automatically terminated by the rescission within 20 days of the creditor’s receipt of the rescission notice (15 USC 1635(b); Reg. Z-226.15(d)(2),226.23(d)(2).

    6. Step Three of Rescission

    Mr. Curtis xxxxxxx was prepared to discuss a tender obligation, should it arise, and satisfactory ways in which to meet this obligation. The termination of the security interest is required before tendering and step 1 and 2 have to be respected by HSBC Mortgage Services Inc.
    XIV. Conclusion

    When Mr. Curtis xxxxxxxx rescinds within the context of a bankruptcy, courts have held that the rescission effectively voids the security interest, rendering the debt, if any, unsecured (See Exhibit #6). (See in re Perkins, 106 B.R. 863, 874 (Bankr. E.D.Pa. 1989); In re Brown, 134 B.R. 134 (Bankr. E.D.Pa. 1991); In re Moore, 117 B.R. 135 (Bankr.E.D. Pa. 1990)).

    Once the court finds a violation such as not responding to the TILA rescission letter, no matter how technical, it has no discretion with respect to liability (in re Wright, supra. At 708; In re Porter v. Mid-Penn Consumer Discount Co., 961 F,2d 1066, 1078 (3d. Cir. 1992); Smith v. Fidelity Consumer Discount Co., Supra. At 898. Any misgivings creditors may have about the technical nature of the requirements should be addressed to Congress or the Federal Reserve Board, not the courts.

    Since HSBC Mortgage Services Inc. have not cancelled the security interest and return all monies paid by Mr. Curtis xxxxxxxx within the 20 days of receipt of the letter of rescission of April 4th, 2007, the lenders named above are responsible for actual and statutory damages pursuant to 15 U.S.C. 1640(a).

    HSBC Mortgage Services Inc. are to take any necessary or appropriate action to reflect the fact that the security interest was automatically terminated by the rescission (15 USC 1635(b); Reg. Z-226.15(d)(2),226.23(d)(2). This requires canceling documents creating the security interest and filing release or termination statements in the public record of FREE and CLEAR TITLE to Mr. Curtis xxxxxxx .

    If a lender fails to respond within twenty days to the notice of
    rescission, the ownership of the property vests in the borrowers and they are no longer
    required to pay the loan. See 1635(b); Staley v. Americorp Credit Corp., 164 F. Supp.
    2d 578, 584 (D. Md. 2001); Gill v. Mid-Penn Consumer Disc. Co., 671 F. Supp. 1021
    (E.D. Pa. 1987).

    7. Where, as here, if, a Creditors does not respond to a properly served and ignores a duly issued TILA notice of rescission, an Entry of default, is the appropriate and, indeed, just and only recourse. According to The Office of the Comptroller of the Currency, “a consumer’s right to rescind is not affected by the sequence of the rescission procedures or a court order modifying those procedures in both open and closed-end credit (Comptroller of Currency, OCC Bulletin 2004-19 (May 7, 2004)). Since the Creditors do not appear disposed to follow and to abide by the rule of law of the Federal Truth-In-Lending Law, this Court has as the only avenue available to conclude this matter, the entry of default against Creditors for failure to comply by illegally proceeding with a foreclosure action despite having received the TILA rescission notice that automatically void the security interest as described in 15 USC 1635(b).

    8. TILA Achieves its Remedial Goals by A System of Strict Liability To further this congressional policy TILA achieves its remedial goals by a system of strict liability in favor of consumers when mandated disclosures have not been made. 15 U.S.C. 1640(a) (emphasis added). The standard applied is considered “strict liability in the sense that absolute compliance is required and even technical violations will form the basis for liability.” Shepeard v. Quality Siding & Window Factory, Inc., supra. at 1299; In re McElvany, 98 B.R. 237, 240 (Bankr. W.D. Pa. 1989). This means that “technical or minor violations of TILA, or Reg. Z, as well as major violations impose liability on the creditor and entitle the borrower to rescind [the loan].” Smith v. Wells Fargo Credit Corp., 713 F.Supp. 354, 355 (D.Ariz. 1989); Jackson v. Grant, 890 F.2d. 118, 120 (9th Cir. 1989); Semar v. Platte Valley Fed. S & L Assoc., supra. at 704.

    This rule is inviolate and is followed by courts in all jurisdictions. See, e.g., Smith v. Fidelity Consumer Discount Co., 989 F.2d 896, 898 (3rd Cir. 1990)(The federal Truth in Lending Act (TILA) achieves its remedial goals by a system of strict liability in favor of consumers when mandated disclosures have not been made); Lewis v. Dodge, 620 F.Supp. 135, 138 (D. Conn. 1985); In re Porter, 961 F.2d 1066 (3rd Cir. 1992); Rowland (John M., Carol S.) v. Magna Millikin Bank of Decatur, N.A., 812 F.Supp. 875 (C.D. Ill. 1992) (“even technical violations will form the basis for liability”); New Maine Nat. Bank v. Gendron, 780 F.Supp. 52 (D. Me. 1992); Dixon v. S & S Loan Service of Waycross, Inc., 754 F.Supp. 1567 (S.D. Ga. 1990); Woolfolk v. Van Ru Credit Corp., 783 F.Supp. 724 (D. Conn. 1990) (same with Unfair Debt Collection Practices Act); Morris v. Lomas and Nettleton Co., 708 F.Supp. 1198 (D. Kan. 1989); Jenkins v. Landmark Mortg. Corp. of Virginia, 696 F.Supp. 1089 (W.D. Va. 1988); Laubach v. Fidelity Consumer Discount Co., 686 F.Supp. 504 (E.D. Pa. 1988); Searles v. Clarion Mortg. Co., 1987 WL 61932 (E.D. Pa. 1987); “Liability will flow from even minute deviations from requirements of the statute and Regulation Z.” Dixon v. S & S Loan Service of Waycross, Inc., 754 F.Supp. 1567, 1570 (S.D. Ga. 1990); Shroder v. Suburban Coastal Corp., supra. at 1380; Charles v. Krauss Co., Ltd., 572 F.2d 544 (5th Cir. 1978).Shroder v. Suburban Coastal Corp., 729 F.2d 1371, 1380 (11th Cir. 1984) ; Goldberg v. Delaware Olds, Inc., 670 F.Supp. 125 (D. Del. 1987); Curry v. Fidelity Consumer Discount Co., 656 F.Supp. 1129 (E.D. Pa. 1987); Laubach v. Fidelity Consumer Discount Co., 1986 WL 4464 (E.D. Pa. 1986); In re Wright, 133 B.R. 704 (E.D. Pa. 1991); Moore v. Mid-Penn Consumer Discount Co., 1991 WL 146241 (E.D. Pa. 1991); In re Marshall, 121 B.R. 814 (Bankr.C.D. Ill. 1990); In re Steinbrecher, 110 B.R. 155 (Bankr.E.D. Pa. 1990); Nichols v. Mid-Penn Consumer Discount Co., 1989 WL 46682 (E.D. Pa. 1989); In re McElvany, 98 B.R. 237 (Bankr.W.D. Pa. 1989); In re Johnson-Allen, 67 B.R. 968 (Bankr.E.D. Pa. 1986); In re Cervantes, 67 B.R. 816 (Bankr.E.D. Pa. 1986); In re McCausland, 63 B.R. 665, 55 U.S.L.W. 2214, 1 UCC Rep.Serv.2d 1372 (Bankr.E.D. Pa. 1986); In re Perry, 59 B.R. 947 (Bankr.E.D. Pa. 1986); In re Schultz, 58 B.R. 945 (Bankr,E.D. Pa. 1986); Solis v. Fidelity Consumer Discount Co., 58 B.R. 983 (E.D. Pa. 1986).

    Violation of the rule of law, since neither you nor any of the defendants have Standing to pursue foreclosure action because, once TILA notice of rescission is given, the lien or security interest in plaintiff’s property becomes void ab initio, even if a court has not yet ruled on the validity of the plaintiff’s rescission (Willis v. Friedman, Clearinghouse No. 54,564 (Md. Ct. Spec. App. May 2, 2002)).

  33. Rock is that you Maher Suleiman?

  34. More nonsense, from the new Jim Jones. Those who haven’t drunk his Kool-Aid had better read the decision from his mentor and stooge Macklin, who lost his home making Garfield’s ludicrous arguments.

    The brainless will obviously just repeat their favorite refrain: “The judges are in the bank’s pocket.”

    scholar.google.com/scholar_case case=12859442104241941661&q=jesinoski&hl=en&as_sdt=6,47

  35. Can a Judge be charged with contempt of court if he/she does not follow the US Supreme Courts decision?

  36. Does anybody think that Justice Scalia did not take Beach Vs Ocwen into consideration?

  37. I think the banksters have been drinking a lot of Kool aid spikes with LSD

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