Rescission Litigation: What to do With that Motion to Dismiss

For more information, please call 954-495-9867 or 520-405-1688

This is for general information only. It is not an opinion upon which you can rely in your case. Get a lawyer. But get one that has really studied this issue because the knee jerk reaction by most lawyers is that rescission cannot be real. Don’t act on anything you read here without consulting an attorney who is licensed in the jurisdiction in which your property is located.

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I have been receiving requests from pro se litigants and lawyers alike who are now faced with the prospects of early settlements where the rescission “card” has been played — i.e., the “borrower” has filed an action seeking to enforce TILA rescission duties. For the moment, the only thing the banks have come up with to escape the standing problem is to file a motion to dismiss where their standing is presumed since they were sued. But upon closer examination, any motion to dismiss raising defects in the notice of rescission is not properly filed unless the one party in the lawsuit that is actually a creditor, CAN raise the issue. And they can’t raise the issue on a motion to dismiss because the motion is raising facts (like date of consummation) that outside the four corners of the complaint. They cannot even raise the issue in an answer or affirmative defense unless they have real standing (injured party) unless they themselves already filed a lawsuit seeking to vacate the rescission.

We know that the bank lawyers are panicked about rescission. They have put on seminars for each other basically concluding that every point I have been making about rescission is correct and that they are ultimately going to lose unless someone comes up with a credible strategy. The essential problem is that they will not and can not come up with a party who has standing to challenge the the rescission and seek to vacate it through a judicial action (i.e., a lawsuit). And while they have been somewhat successful in the trial courts on some of their efforts to raise issues on motion by raising statute of limitations or other issues, they understand that on appeal, they will lose.

By the way, to the extent their motion to dismiss attacks the rescission, the answer is that the rescission was effective when mailed, by operation of law and that therefore at this moment the note and mortgage are void. And, since they did not file to change anything within the 20 days for compliance, they can’t attack the rescission, so it is permanent. And more importantly they no longer have standing to challenge the rescission because their standing WAS based upon the note and mortgage which are now void instruments. They would need to file an action (lawsuit) seeking to vacate the rescission BEFORE the expiration of 20 days from receipt of rescission (not a motion to dismiss that takes the four corners of the complaint as true). And the party upon whose behalf the action is filed MUST be a CREDITOR in the true sense of the word — not some party holding void instruments, like the note and mortgage.

In my opinion, the proper course of action is to attack the motion to dismiss as an improper use of court procedure to avoid the requirements of pleading. A motion to strike the motion to dismiss would be appropriate. If you accompany that with a memo of law, you will have perfected the record. They want to try to skate by the standing requirement and the small window of opportunity to challenge the rescission and still have the old party who was merely holding paper that is now void file a motion and get rid of the rescission that way.

Judges would like to grant their motion because most of them still believe this is a gimmick by borrowers instead of seeing it for what it is — fraud by intermediaries who have no privity with either borrowers or the investors whose money was used improperly for origination and acquisition of loans (i.e., the REMIC Trust was ignored). The Judges don’t like the result either — the borrower gets a “free house” in their perception and the bank loses out on the loan. Neither assumption is true.

In virtually all cases, the borrower has heavily invested in the property and made many payments and has suffered through years of litigation and opposition to illegal acts by the players who pretend to be lenders or pretend to represent lenders.

Blaming the borrower is completely wrong. The borrower was an unwitting pawn in a game of fraudulent conversion by the banks. And “the bank” loses only some of their investment if they actually paid for the loan or they represent a party who has actually paid for the loan. If they are not creditors and they don’t represent the creditors, where is the harm? If the loan contract actually exists and has been consummated in the legal sense (offer, acceptance and consideration) and if the rescission is valid — they get paid back all the principal they loaned less the fees paid to third parties for origination of an illegal table-funded loan. Where is the harm in that?

It was the borrower who came to the table in good faith, not the banks.

93 Responses

  1. a reminder that there is a follow up call to Neil tonite…
    Garfield’s Goose & Friends with your host, greg (episode 7)
    (every Thursday night starting 15 minutes right after Neil’s show)

    Call in at (724) 444-7444 (then use Call ID: 139335) then “0” for guest
    and/or use your computer to blog/type at http://www.talkshoe.com/tc/139335
    6:45 PM Eastern Thursdays (for 60 min)

    please use the phone line to speak and ask questions
    computer access will only allow you to hear and type into the blog…
    all welcome

  2. The author of the article doesn’t address the fact that ….l

    1) The statute requires the creditor to respond in 20 days

    2) nowhere in the statute does it allow for the creditor to ignore and then file a foreclosure against the void mortgage based on a default that never happened because the borrowers are instructed to stop making payments once they rescind.

    3) the creditor waived the remedies and defenses once they ignored

    4) the borrower was injured when the creditor ignored, they lost equity, they were kept in a state of limbo, they had their credit ruined and are no longer able to refinance

    5) the tender issue arises when the 20 day rule is complied with, the release of the lien allows the borrowers to refinance with a new lender, and at that point they can tender back what is owed. But the 20 day rule must be obeyed for this to work. When a creditor ignores the 20 day rule, they are further injuring the borrower who has a right to find a new lender to refinance with. The 20 day rule is the plain language used in the statute..it is either meaningful, or it is meaningless. The Supreme Court says the words mean what they say. Period.

  3. The article is written by lawyer tbough and misses point of void note and 20 day requirement. Claims letter is enough then court action. Here we go again…Not.

  4. In LexisNexis premier legal data co not exactly internet crazy. (Worked there in former life lol! Then again all data seems corrupt these days.)

  5. LexisNexis® Legal Newsroom – Real Estate Law

    “So what does all this mean? We think this: A borrower’s letter notifying a lender of an intent to rescind is itself the rescission. The loan is cancelled at the moment notice is given. In other words, rescission is not effected by a court, it is accomplished with a letter.”

    http://www.lexisnexis.com/legalnewsroom/real-estate/b/real-estate-law-blog/archive/2015/03/03/supreme-court-holds-that-tila-rescission-is-accomplished-with-notice-alone.aspx

  6. more on rescission from the viewpoint of the frightened creditors…

    http://www.creditorssidebar.com/2015/01/i-declare-rescission/

  7. U.S. Bank, N.A. v. Kosterman, 2015 IL App (1st) 133627
    helpful… 2/3 decision in favor of homeowner to challenge standing

    http://www.illinoiscourts.gov/opinions/AppellateCourt/2015/1stDistrict/1133627.pdf

    including…
    This is a mortgage foreclosure case in which the trial court dismissed defendants’ affirmative defenses, entered summary judgment in plaintiff’s favor, and entered an order of possession in plaintiff’s favor. The trial court erred in finding that lack of standing is not an affirmative defense. Moreover, defendants were improperly denied the opportunity to mount a meaningful defense because plaintiff failed to produce the records relied upon by its affiant and refused to produce the affiant for a deposition. Accordingly, we reverse and remand for further proceedings consistent with this order.

    …also includes dissenting opinion of Justice Liu – useful in understanding why most judgements go the other way

  8. [audio src="http://www.brydgeslaw.net/radio/TLBS_Podcast_103115_FullShow.mp3" /]

  9. David Cocroft, et al. v. HSBC Bank USA, N.A., et al., No. 14-1640, 7th Cir.; 2015 U.S. App.

    http://media.ca7.uscourts.gov/cgi-bin/rssExec.pl?Submit=Display&Path=Y2015/D07-31/C:14-1640:J:Kanne:aut:T:fnOp:N:1597118:S:0

  10. Sounds like the 8th Circuit is hostile to borrower’s. Either it ignores note, deed are void or 20 day timeframe. Cases point out need to review material violations of TILA not just disclosures.

  11. here’s how they roll…
    http://www.lexislegalnews.com/articles/1391/7th-circuit-affirms-dismissal-of-quiet-title-fraud-and-icfa-claims
    7th Circuit Affirms Dismissal Of Quiet Title, Fraud And ICFA Claims

    Mealey’s (August 04, 2015, 11:15 AM ET) — CHICAGO — After finding that a district court properly dismissed claims for quiet title and violation of Illinois law, the Seventh Circuit U.S. Court of Appeals on July 31 affirmed a district court’s decision to grant summary judgment in favor of several lenders and mortgage entities (David Cocroft, et al. v. HSBC Bank USA, N.A., et al., No. 14-1640, 7th Cir.; 2015 U.S. App. LEXIS 13368).
    (Opinion available. Document #85-150818-024Z.)

    Trust

    David and Veynelcia Cocroft refinanced the mortgage on their home through Countrywide Bank FSB. As part of the transaction, the Cocrofts granted a mortgage to Mortgage Electronic Registration Systems Inc. (MERS), which acted as the nominee for Countrywide. Bank of America N.A. (BOA) succeeded Countrywide. BAC Home Loan Servicing, an affiliate of BOA, took over servicing of the loan.

    The note and mortgage were pooled into a trust under a pooling and service agreement. The agreement established HSBC Bank USA N.A. as the trustee. MERS subsequently assigned its interest in the loan to HSBC.

    Default

    After the Cocrofts defaulted on their loan payments, Countrywide sent them three notification letters. The Cocrofts alleged that in May 2009, they learned that Countrywide had made a misrepresentation about their loan. The Cocrofts indicated that they were exercising their right to cancel the loan and asserted a right to rescission because of Countrywide’s unspecified disclosure violations. BOA notified the Cocrofts that the loan was still valid. The Cocrofts recorded rescission documents with the Cook County recorder of deeds. The Cocrofts sent “Settlement and Closure” and “Cease and Desist” letters to BOA, asserting their right to cancel the loan.

    HSBC hired a law firm, Codilis and Associates, which sent the Cocrofts a notification of foreclosure proceedings. HSBC was identified as the trustee and BAC as the loan servicer. BOA hired the law firm Dilworth Paxson, which notified the Cocrofts that the loan was not rescinded. On Jan. 19, 2010, HSBC commenced a foreclosure action against the Cocrofts in an Illinois state court.

    The Cocrofts sued HSBC, MERS, BOA, BAC, Codilis and others in the U.S. District Court for the Northern District of Illinois, asserting claims for violation of the Illinois Consumer Fraud and Deceptive Business Practices Act (ICFA), fraudulent possession and quiet title. BOA, BAC, HSBC and MERS moved for summary judgment on the remaining claims, which was granted. The Cocrofts appealed to the Seventh Circuit.

    Objection

    In their opposition to summary judgment, the Cocrofts requested that the District Court strike the affidavit and deposition of Lanisa Jenkins, who is a vice president, business support manager for BOA. The Cocrofts argued that the affidavit failed to satisfy Federal Rule of Civil Procedure 56’s requirement that “an affidavit or declaration used to support or oppose a motion must be made on personal knowledge” and that portions of the affidavit and deposition conflicted.

    The appeals court agreed with the District Court’s decision that Jenkins’ affidavit satisfied the personal knowledge requirement under Rule 56. The Cocrofts argued that the affidavit was inadmissible because she could not be adequately familiar with the procedures used by Countrywide before it was acquired by BOA, Jenkins offered no testimony regarding how accurate Bank of America’s records were and some of the records were not prepared by Jenkins. The appeals court said that all three arguments failed and that the District Court did not abuse its discretion in overruling the Cocrofts’ objection.

    Fraud

    The appeals court said the Cocrofts failed to allege a cognizable injury and, therefore, their claim for violation of the ICFA failed.

    The appeals court said the Cocrofts’ complaint failed to cite any statute to support their fraudulent possession claim. The appeals court said the Cocrofts failed to identify any authority to show that Illinois Code of Civil Procedure Section 15-1701(b)(1) applies before foreclosure has been initiated. The appeals court said the Cocrofts failed to allege a genuine issue of material fact and found that summary judgment was appropriate.

    The appeals court said that the Cocrofts lacked standing to challenge the transfer of the loan and that their claim for quiet title failed.

    The case was heard by Circuit Judges Michael S. Kanne, William J. Bauer and David F. Hamilton.

    The Cocrofts are represented by Sabrina Herrell of Logik Legal in Chicago.

    The defendants are represented by Steven R. Smith and James Leighton O’Connell-Miller of Bryan Cave in Chicago.

  12. helpful info
    http://bankingandrealestatelitigationblog.riker.com/category/uncategorized/
    including
    On appeal, the Eighth Circuit cited the 2015 Supreme Court decision of Jesinoski v. Countrywide Home Loans, Inc., and held that the District Court should not have granted summary judgment based on the timing of the lawsuit, because a borrower exercises his or her right of rescission by notifying the creditor of the intention to rescind, which the borrowers here did in January 2010. 135 S. Ct. 790 (2015). The Court affirmed the grant of summary judgment, however, based on the accuracy of the disclosure statements. Under TILA, the finance charge of a statement is deemed accurate if the disclosed finance charge does not vary from the actual finance charge by more than 0.5% of the total credit extended. See 15 USC 1605(f)(2). Here, the difference in charges was $944.31, which was within the 0.5% range, so the disclosure statements were accurate under this provision.

    >>> There is a narrower tolerance for variation under TILA after the initiation of a foreclosure process, in which case the disclosure is only accurate if it is greater than or within $35.00 of the actual charge. See 15 USC 1635(i)(2). <<<<

    Because the borrowers had exercised the right to rescind in January 2010, however, which was two months before the foreclosure process was initiated, only 15 USC 1605 applied. As the statements were accurate under that provision, the rescission was untimely.

  13. Bob G.

    The world has changed since 2011… start catching up…

  14. @niedermeyer…one other thing.

    unlike you, i’ve been involved in about 17 bankster/debt collector actions since 2011–as a plaintiff. only once was i a defendant, and in that case the plaintiff ended up paying me $5,000 to settle and go away.

    so, you see, because i’m in court every week or so i, unlike you, cannot afford to advance tin-foil hat stuff that i cannot prove with admissible evidence. because once i get tagged as a tin-foil hat guy whose hair is on fire–like you–my revenue stream stops.

    so there you have it, pal.

  15. @niedermeyer

    Whatever

  16. Bob G. …

    I still read here and you are still clueless ,, your mental faculties left you decades ago …

    re: “I’m not sure that folks here understand what Jesinoski was about.”

    ***********

    We know EXACTLY what Jesinoski was about. The Federal Reserve and their political friends attempted to engineer the transfer of ownership of all or nearly all residential property to the banks by :

    1.) Pushing credit on people that were shaky at best.
    2.) Allowing that credit balloon to push up prices
    3.) Allowing the cycle to go on for about 10 years (1998-2007) so that the average Joe who didn’t want to participate in the bubble was more or less forced to (most Americans move every 7 years).
    4.) Withdrawing easy money to deflate the bubble and crash the economy so that their puppet , a socialist , could have the emergency he wanted to seize power.
    5.) This allowed the banks to foreclose and pick up properties CHEAP , especially if you consider the money lent was not theirs.
    6.) Foreign countries now have a virtual guarantee from our government that loans to the USA will be backed with land.

    But the banks allowed the foreclosures to linger for 5+ years … the properties they bought for their own use as rentals fell in value as the move was too swift… they didn’t expect their methods to be so effective at stomping on the middle class.

    We are being set up for a bigger fall in one to two years where they will not delay in seizing properties and they quite simply don’t care about the nominal values of the properties in USD as the USD will likely be merged or replaced with a “North American” currency and they will be the only available landlord.

    Scalia had his eyes open … he threw us a liferaft… That is what Jesinoski is about in the end. Restoring the rule of law and the tyranny of the bench that had fully distorted the intentions of the TILA act. Scalia is my hero… and your intentional muddying of the waters is noted.

  17. lotta love

  18. 30x the pledges will magically appear in his Cayman Islands accounts confirmed by the call center employees in India!

  19. The Bob Hurt Telethon ???

    * But will be believe we tendered the money?

    Shadowcat performing on a 4-legged chair?

    But is the chair from her estate, or is it a trick chair from the office of the VP of Wells Fargo ???

  20. e tolle

    sign me up for a pledge
    matching grant
    i pledge as many blue tip matches as needed to light the fire
    greg

  21. Will be like watching Trump and the Republican debates lol! Tiime to shut down the Wall St, bankster circus!

  22. I’m going to be hosting a telethon all this weekend in order to raise funds for Bob Hurt’s Law Studies Scholarship Fund…..more out of necessity than trying to do the right thing. I figure Living Lies will be somewhere around 75% less painful if he were able to grasp basic elements of law. Presently, not only is he cranially understaffed, but his demeanor is that of a shrill case of rhoids.

    Of course I’ll be showing video clips of children pilfering garbage dumps and too many mangy dogs and cats to count, all of which have nothing to do with Bob save for the fact that it’s how it’s done in late night fund raising, so why not?

    There’ll be plate spinning and chair balancing, the latter to be attempted by Shadowcat, using only a four legged chair on the ground. I have my doubts that she can sit upright without falling over and then writing about it.

    So please, open your wallets as wide as Bob’s mind is closed.

    The band begins at ten to six
    When E. ToLLe performs his tricks without a sound
    And Mr. T. will demonstrate
    Ten somersets he’ll undertake on solid ground
    Having been some days in preparation
    A splendid time is guaranteed for all!
    And tonight Mr. T is topping the bill

  23. Such as abiding by all local, federal laws and answering notices?

  24. and there were MANY more things promised by the eventual new lender in the paperwork besides a check to the former lender

  25. if banks thought the consummation was self evident they would not be adding a new closing documents called “consummation agreement” to the packages for new loans… (stated by me with first-and-a-half hand knowledge)

    they are presently relying upon a judge to rule when it took place – and that is too darn risky…

    fact is that unless the borrower consents that he/she was aware that “an event” constituted consummation, any court would be hard pressed to command something to BE when both contracting parties could not come to terms on an essential element of “meeting of the minds”

    in relationships, “NO MEANS NO” and non-consensual consummation is rape…

    – a judge cannot force a woman to agree that she had consensual consummation with a man
    – a judge ought not to be able to force a borrower to agree that she had consensual consummation with a lender if she never saw evidence that the lender provided what was promised

  26. SCOTUS confirmed the procedure of TILA rescission no way around it. Only issues to be raised are timeliness etc win the 20 days. If tgey try to resurrect they are over reaching. Tender, sequence may be raised w/in the 20 day action it sounds like but must be equitable to borrower as well. Somehow bankster defenders want to only focus on notice ignoring fraud etc that can be raised making notice, closing irrelevant.

  27. Bob G sounds like ur more in league w the wannabe legalese expert types. Some of us aren’t waiting around for banksters to bribe their way to change the law. Good luck watching the banksters and crooked courts do it to u again.

  28. The only issue before the court was.
    IF THE BORROWER HAD TO SUE WITHIN 3 YEARS TO ENFORCE THE RESCISSION .

  29. Rock was correct.
    The case will go back to the lower court to discuss tender.
    The way I see this is that if its determined they had no proof of claim under TILA that triggers the 3year RTC, …or their claim was untimely..
    That default interest is gonna be tough to tender.

  30. (rciferri comments on Dwight’s Judge citing bad tender caselaw to deny the effectiveness of Dwight’s timely 3 year rescission)

    @Dwight.

    Your arguments seemed fine.

    The Judge is looking at a reversal, citing all those cases that rely on equity.

    Justice Scalia specifically determined TILA abrogated common law equitable rescission. That was in response to pretender lender arguments that Jesinosky’s rescission was ineffective because he didn’t tender.

    And, no, Rock, that is NOT dicta, because it was a determination essential to SCOTUS’ opinion and dealt with the pretender lender’s spurious arguments in that regard. SCOTUS would not have been able to reverse the 8th Circuit if the pretender lender were right about tender.

    Sounds like you got a typical judge, Dwight. I’m really sorry about that. Hopefully the appeals judge won’t be as dense about the sweeping effect Jesinoski had on the cases your trial judge relied upon.

    IMO, it’s good your judge cited those cases on the record. A smarter judge would not have done so and would have been more general if he really wanted to screw you. Now an appeals court can look at it and say: “it’s as if he didn’t even read Jesinosky.”

    IMO, ALL of those cases were abrogated by Jesinoski, to the extent that they stood for the proposition that a court could insert itself as some kind of equitable referee whose approval is needed before a TILA rescission becomes effective.

  31. (rciferri’s Greatest Hits)

    @ Rock, Bob Hurt, Shadowcat:

    “The rest was dicta by your own definition.”

    Haahaaa! Good one, Rock! You just can’t stand losing, can you?

    Good pretender lender move – quote only the part you can twist into a pretzel to support your bias. How’s that working for you with regard to your assertion that one still has to sue to rescind under TILA, despite SCOTUS’ opinion in Jesinoski?

    Now, Rock, you know I can’t let you get away with just cherry picking the part of the definition of dictum that suits you. So, let me remind you about this part:

    Dictum is that which is “not necessarily involved in the case or essential to its determination.”

    All of the following determinations made by SCOTUS in Jesinosky were ESSENTIAL to their holding and were necessarily involved in the case, because they are direct refutations of the bogus arguments for the affirmance of the circuit court ruling that were brought by the pretender lenders (they clearly screwed themselves by doing that, because the following determinations by the highest court in the land ARE NOT DICTUM, and SCOTUS would not have had to consider and reject them they weren’t first argued by the pretender lenders!):

    1. A letter is sufficient to rescind. It was essential to SCOTUS’ opinion to state that Jesinoski’s letter was sufficient to rescind to dispose of the argument by Countrywide that a lawsuit was required. Thus, it is not dicta.

    2. A borrower does not have to tender before his rescission is effective. Again, it was essential to the court’s holding to get through the pretender lender’s thick skulls that TILA abrogated the common law to create its own procedures, otherwise, SCOTUS couldn’t have reversed the way it did (stating Jesinoski’s letter was sufficient).

    3. The pretender lender’s refusal to “accept” the rescission in no way invalidated the rescission. Again, this analysis was essential to SCOTUS’ opinion, because, otherwise, they wouldn’t have been able to reverse and hold that the lower court erred in dismissing the complaint in the face of Jesinoski’s rescission

  32. upcoming… watch for this… to be argued in California Supreme Court on Wednesday, December 2, 2015, at 9:00 a.m., in Los Angeles.

    Supreme Court Case: S218973
    Court of Appeal Case(s): Second Appellate District, Div. 1
    B247188
    Case Caption: YVANOVA v. NEW CENTURY MORTGAGE CORPORATION
    Case Category: Review – Civil Appeal
    Start Date: 07/02/2014
    Case Status: scheduled for argument
    Issues: Petition for review after the Court of Appeal affirmed the judgment in a civil action. The court limited review to the following issue: In an action for wrongful foreclosure on a deed of trust securing a home loan, does the borrower have standing to challenge an assignment of the note and deed of trust on the basis of defects allegedly rendering the assignment void?
    Case Citation: none

  33. (rciferri highlight reel)

    @Rock

    >>>“Jesinoski was remanded back to see if it fact there is a TILA violation.”<<>>“If there isn’t, the Jesinoski’s lose their home;”<<<

    Not so fast cowboy. First, Jesinoski’s loan is currently VOID. Upon remand it is incumbent on the pretender lender to show it made a loan or was assigned the right to enforce a loan made by someone else. Trotting out a pdf copy of a note won’t help; nor will a copy of the mortgage or deed of trust. They are now NULLIFIED. The court should order the pretender lender to show its interest in the loan (some other way besides making pretend it holds the note); failing that, the Court should enter judgment in favor of Jesinoski.

    If the pretender lender can show it has an interest in the loan (i.e., it paid value for it) then the court can inquire if the pretender lender gave back all the money paid by the borrower and filed a satisfaction of mortgage or deed of trust within 20 days of receipt of Jesinoski’s TILA rescission notice.

    If the pretender lender didn’t do what it was supposed to do within those 20 days, the pretender lender has waived any arguments that it complied with TILA. Jesinosky makes it clear that TILA abrogated the common law. The pretender lender’s remedy, therefore, is solely contained in TILA. And, yes, that part of Jesinosky is NOT dicta. It was essential to SCOTUS’ analysis rejecting the argument of the pretender lender that the legislature intended to graft equitable principles into TILA.

    By the way, Rock, here are some other nasty nuggets of law you and your pretender lender friends won’t like that are likewise NOT dicta:

    1. Rescission is complete upon the initial lender receiving a TILA rescission notice;

    2. Borrower does not have to first tender for rescission to be effective;

    3. Pretender lender’s “refusing to acknowledge the validity of the rescission” did not invalidate the rescission which was effective upon receipt; and,

    4. A lawsuit is not needed to effect the rescission; only a borrower’s TILA letter.

  34. (rciferri on the impact of Jesinoski)

    For the first time in my life, I see SCOTUS granting certiori for every case that may possibly be affected by Jesinosky and reversing the cases.

    Do you know how rare it is for SCOTUS to grant certiori, Rock?

    Do you see now that SCOTUS means business?

    Do you see now that SCOTUS is not going to take the lower courts acceptance of the banks’ fantasy made up law anymore?

  35. rciferri gives Bob Hurt some advice ……

    @bobhurt: Read Jesinosky again. Then read it again.

    And read it again as many times as you have to until you understand that, regardless of what some courts have said prior to being overruled, NO BORROWER TENDER IS REQUIRED TO EFFECT A TILA RESCISSION – ONLY A LETTER.

    SCOTUS has RULED thus:

    “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-at-law’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 its closest common-law analogue. The clear import of § 1635(a) is that a borrower need only provide written notice to a lender in order to exercise his right to rescind.”
    Jesinosky v. Countrywise, 135 S.Ct. 790, 793 (2015).

  36. Mike .. Agree .. great post !!!

    David .. Agree … cases have not had a chance to work their way thru the system yet since Jesinoski .. but they are coming !!

    Bob G. – Jesinoski was decided in Jan. 2015 … it takes time for the cases to work their way thru the system .. the lower courts are still defiant and refuse to accept that Jesinoski is now the law of the land. So it will force borrowers to appeal and work their way thru the slow wheels of the justice system. The lower courts are still citing old caselaw that was deemed wrong by the Supreme Court.

    (Another rciferri highlight post from the past) ……

    >Bob Hurt asks “Can anyone show me how Rock’s assessment of the TILA rescission issue fails to align with prevailing the appellate court opinions?”

    rciferri responds >> Sure. Actually its very simple.

    Myself, Neil Garfield, several circuit courts of appeal and all other non-biased persons with average reading comprehension skills had no problem reading the plain wording of the TILA statutory language and understanding what it said.

    Rock and several circuit courts of appeal also had no problem reading the TILA statute and understanding what it said, because they seem to me to be reasonably intelligent persons.

    However, their problem was overcoming their BIAS toward the banks and against homeowners.

    Rock thinks: how can a borrower just rescind his loan with a letter, when that is clearly a less than optimal outcome for a bank? The problem for Rock and the other circuit courts is this: justice is blind; the law is the law as written by the legislature and the courts must respect that.

    That is what Jesinosky is really about – respecting the law as written by Congress.

    Rock just can’t bring himself to admit that he was wrong (and so were several circuit courts of appeal and other biased persons) in their failed attempts to graft upon TILA rescission certain common law rescission requirements.

    I could show you how Rock was wrong by just telling you to read TILA. However, Rock seems to think a circuit split on the issue means he’s right – even AFTER SCOTUS set him straight when it resolved the split by deciding Jesinosky the way it did.

    A borrower’s lack of tender or even lack of the ability to tender does not change the legal effect of the borrower’s TILA rescission because Jesinosky said so. And, no, that was not dicta, because it was essential to the Court’s decision in rejecting the bank’s assertion that Jesinosky’s TILA rescission was not effective.

    As for “prevailing” appellate court opinions, Rock just can’t get over the fact that those opinions are no longer prevailing, because they were simply wrongfully decided – OVERRULED to the extent they conflict with Jesinosky, because SCOTUS is the supreme law in such regard, not some circuit court of appeals courts that have been getting it wrong for years.

    No lawsuit or common law tender is required for the borrower’s tender to be effective because SCOTUS said so.

    Again, that is not dicta – that is MANDATORY AUTHORITY!

    Tender under TILA, on the other hand, happens AFTER the loan became VOID.

    Also, it is instructive to note, that the tender procedures with regard to TILA rescission used to have ten day time limit. That was changed to 20 days, according to legislative history, so that the “lender” could investigate whether or not the borrower had the right to rescind in the first instance. See, S. REP. NO. 96-368 at 29 (1980), as reprinted in 1980 U.S.C.C.A.N. 236, 264. In my opinion, a “lender’s” failure to make such an investigation within the 20 days is its unequivocal and knowing relinquishment of any right to “reject” or challenge what it views as an improper rescission by the borrower.

    Another point to ponder: how can a “lender” show it has an interest in the loan when their security interest has been voided and, even if they once had the right to enforce the note, they can no longer do so? I don’t believe there is a way they can.

    In such an instance, how can a court require a borrower to tender the value of the loan to a party that can’t even show it has an interest in the loan? I don’t believe there is way it can. For that matter, how could a court permit itself to even hear a “lender’s” contentions that the borrower’s TILA rescission is somehow defective? I don’t believe a court can. That issue is waived by the “lender” unless it returned all money paid by the borrower, filed a satisfaction of mortgage or deed of trust in the land registry AND sued to set aside the borrower’s TILA rescission within 20 days of its receipt of the same.

    Sure, the district courts and circuit courts of appeal can get cheeky in the face of SCOTUS and continue their wholly biased opinions depriving a homeowner of their right of rescission. How do you think each and every member of SCOTUS will like that (Jesinoski was a UNANIMOUS opinion)?

    SCOTUS put all the other courts who have been deciding cases with a lender’s bias that they WILL be reversed – at least with regard to pretending any security interest or right to recover under a note is not void in the face of a borrower’s TILA rescission.

    So, Rock’s analysis fails to align with the prevailing appellate court opinions because he’s pretending Jesinosky never happened (when it comes to a plain statement by the Court that Jesinosky’s letter rescinded his loan – and, no, that is NOT dicta – it was a determination that was essential to the Court’s holding).

    In short, Rock’s “analysis” fails to align with the prevailing appellate court opinions because Jesinosky is THE prevailing appellate court opinion.

  37. AM DOING AS WE SPEAK , BOB G. IF YOU WOULD LIKE TO SEE WHAT WE SENT THEM. JUST EMAIL ME. DJABELANGER@OTMAIL.COM

  38. @DwightNj,

    @DwightNj,

    The “mercenary crowd” are sowing confusion on purpose.

    Their aim is to feather their own nests by preying upon the people that do not or cannot have the time to get to the bottom of this banker-induced, criminal behavior.

    The cat is out of the bag. The banks are the true criminals, not distressed homeowners.

    There will be herds of cats leaving the comfort of their bags around Christmas when “The Big Short” comes out in the movies.

    Everyone should read, “The Web Of Debt”, by Ellen Hodgson Brown, in the meantime.

    Our government has been captured by an international, criminal banking cartel and they are operating out of the intentionally-mislabeled “federal reserve”. It really is that simple.

    The mercenary crowd are representatives of the “investor crowd”; those that have a gambling addiction called “The Stock Market”.

    “Shadowcat” is one such “self-described representative”, of the “investment class” and he, she or it – “sheit” – has said to me on this blog borrowers should not be let off the hook until the investors are paid.

    Whether “sheit” invests in mortgages or is instead, addicted to gambling through “The Market”, it dosen’t matter- the damage done the rest of the country remains the same… and “sheit” doesn’t care so long as “sheit” suppresses those bent on finding the truth…

    That way their investments are protected.

    The sad truth is: the rest of the world already knows the banking industry here in the states is compromised by criminal behavior.

    The sad truth is: Law enforcement has been co-opted to conceal foreclosures are based on fraud.

    The sad truth is: the American Dollar will fall as the “International reserve Currency” unless We The People insist upon subscribing to the “Rule Of Law”.

  39. IF THE CFPB SAY THE LENDER / CREDITOR IS THE SAME.

    SO IF SOME OTHER BANK OTHER THEN THE CREDITOR OR LENDER ON ALL PAPERWORK/CONTRACT/MORTGAGE/NOTE

    DOES NOT MATCH THAT. THEN HOW COULD THAT FAKE PRETENDER LENDER CREDITOR COME IN 10 YRS LATER AND SAY THEY WERE THE CREDITOR AND LENDER??

    THIS AGAIN BRING US TO THE ATTENTION. OF FULL DISCLOSURES. POINT.

    AND IT ALSO BRING UP THE BIG QUESTION. HAS THE TRANSACTION AS TO THE CONTRACT BEEN CONSUMMATED AS TO TILA.

    I SAY NO. AND UNTIL WE THE BORROWER’S GET THAT INFO , THAT IS REQUIRED TO BE GIVEN TO US BY THE REAL LENDER/CREDITOR THAT LENT THERE MONEY TO THE TRANSACTION.

    THEN I WOULD SAY , THAT THE 3 DAY, AND 3 YR HAS NOT BEGONE TO RUN . BY THE STATUE OF TILA.

  40. Well, I’m not interested in academic arguments on this subject. I’m from Missouri, so to speak. Show me a few wins based on Nei’ls interpretation of Jesinoski. Without those wins and possibly an appellate decision in favor of the homeowners based on NG’s version of Jesinoski, nothing is being accomplished here. Just an echo chamber here. So somebody who buys NG’s argument, please go try this out and report back to us.

  41. Okay Mike

  42. (rciferri highlights from the past)

    @Rock. You said:

    >“Should the lender wish to contest the rescission notice, it will send a letter so stating to the borrower. Then either the lender or the borrower may file a declaratory judgment action to determine whether the notice was valid. If the borrower defaults, the lender will file a foreclosure action or initiate nonjudicial foreclosure as appropriate. The borrower would then assert rescission as an affirmative defense to foreclosure or >in a declaratory judgment action to halt a nonjudicial sale.

    >Also, courts have the discretion to not only determine whether there is a proper basis for a rescission notice but also to reorder the creditor’s and debtor’s obligations in the event rescission was proper. 1635(b). Even if the rescission notice is well founded, a court can still require the borrower to show an ability to tender before forcing the lender to return >funds and void a security interest.”

    ———————————————————-
    (rciferri responds) …
    First, in the scenario you’ve outlined above, if foreclosure proceeds or is initiated in the face of a TILA rescission and enforcement action by the borrower, the borrower should do more than just assert a TILA rescission defense – the borrower should apply for a TRO and temporary injunction to enjoin any foreclosure or eviction pending the determination of the enforcement proceeding.

    Second, your proposed procedures are certainly not explicitly provided for in TILA. So, you’ve laid out a whole new administrative procedure above that you must think is IMPLIED in TILA.

    Guess the UNANIMOUS SCOTUS destroying another “implied” requirement – the need for a borrower to get a court to agree with his rescission before the rescission is effective – doesn’t deter you from continuing to desperately push several other implied requirements.

    Don’t you get it? SCOTUS is not playing the “judge made law” game anymore as far as TILA rescission is concerned.

    So, here are the pretender lender TILA rescission remedies:

    1. Suing within 20 days of being served with the rescission notice (and, I believe, they are also required to get a judgment, TRO and/or preliminary injunction, within those 20 days); and,

    2. Change the law.

    Those are the 2 options for the pretender lenders listed above.

  43. @DwightNJ,

    Please drop me your email when you can :mikekeane@optonline.net.

    Or you can phone me on my cell 908-489-8496.

    We are preparing a federal case in the NJ courts- based on some of your experiences, I feel you will fit right in.

    mike

  44. (rciferri highlights from the past) ….

    “please point out where in TILA you see provision for the pretender lender to accept or dispute a rescission. Also, while you’re at it, where’s the provision that says a pretender lender may dispute, or, even accept a rescission after the 20 days have passed.

    Finally, its the rules of statutory construction that govern what the statute requires or doesn’t require – sorry, but your personal views and version of “common sense” is not part of those rules. Please review your first year law school legal analysis and research class notes, lol!”

    (Responding to the bank shills who argue that ” common sense” doesn’t allow a borrower to void a mortgage and note without a suit being filed)

  45. (rciferri highlight post from past discussons) – Regarding Bob Hurt, Rock and Shadowcat always citing the old case law from before Jesinoski as they scrambled to defend the banks ….

    “And those court’s corrupt rulings (ignoring the plain wording of TILA and improperly re-writing the statute despite un-ambiguous language) just got bitch slapped by SCOTUS.

    Sorry, you are wrong. The plain language of TILA sets up a statutory remedy with particular consequences to the pretender lender if not complied with. It also gives the pretender lender a 20 day deadline in which to do so. In contrast, there is no procedure in TILA to nullify the rescission or unwind the transaction after the 20 days have passed.”

  46. Bob Hurts misstates the Supreme Court ….

    “EVEN IF the right to rescind accrued AND the borrower sent valid notice of rescission, the loan requires unwinding which requires the participation of both borrower and creditor. So if the creditor won’t do it, the borrower must sue to make it happen. Otherwise, when the borrower breaches the note in dispute, the creditor will foreclose and the borrower can bring up the rescission in court at that time.”

    No Bob ..the Borrower DOES NOT HAVE TO SUE !!!

    The Supreme Court said NO LAWSUIT IS NEEDED.

    What don’t you understand about that ??

    The unwinding procedures are already described in TILA … and those procedures say 20 days the creditor must act … nowhere in those unwinding procedures does the statute allow for a creditor to ignore the rescission and wait several months in order to file a foreclosure !!!

    That is not an option in the unwinding procedures.

    If the creditor creates a “vapor option” that they create out of their own minds ..like waiting, ignoring the rescission and then foreclosing .. it fails because they are already in violation of TILA ..and that violation bars them after 20 days from filing a foreclosure action.

    Jesinoski confirmed and validated that the rescission is effective and requires no lawsuit … ever !!!

    The borrower never has to file for enforcement … never.

    And the rescission is still effective and valid.

  47. Bob Hurt, you said in your post below >>>

    >>> Neil ALL OF THE CIRCUITS have managed rescission of decades before Jesinoski, and still manage them the same way after Jesinoski, except that now ALL of them, not just some of them, allow the borrower to sue under 15 USC 1640 later than 3 years after loan consummation.
    >>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>

    My reply – That’s what you goy out of Jesinoski Bob??

    That all the unanimous Supreme Court was saying is that borrowers can file a lawsuit outside the 3 year window ??

    Wow .. you sound very confused, I don’t believe that was their message at all.

    In my opinion what they were saying is that NO LAWSUIT was necessary for a borrower to effect rescission. No lawsuit Bob.

    And they were confirming that as long as the borrower had rescinded within the 3 year window from consummation, it stands as being a rescinded loan anytime into the future ..no matter what may come in the future … as long as the borrower mailed the letter within 3 years.

    So in my opinion the Supreme Court was wiping out all of these other hurdles that lower courts were putting in front of borrowers who had timely rescinded. Those lower courts were preventing the borrowers rescissions and denying them for all kinds of wrong reasoning…all of the same wrong reasoning that you Bob Hurt promote in your posts.

    The lower courts have been WRONG .. is what Scalia was saying in Jesinoski.

    In a nutshell … if a borrower has rescinded inside the 3 years .. then nothing attempted later treat that rescission as though it was not really effective.

    No argument 5 years later by a servicer attempting to foreclose can allow a court jurisdiction to hear a foreclosure case on a rescinded and void mortgage loan … that’s the bottom-line.

    Like Neil says … if anything, the creditor should come forward within 20 days and file his own action seeking to vacate the rescission.

    They cannot file a foreclosure action for 2 reasons ….

    1) the loan instruments were effectively rescinded and made void

    2) There is no default in a TILA rescission when the borrower stops paying.

    A foreclosure complaint requires valid loan instruments to be in effect and it requires that there is a default.

    A foreclosure action requires Notices of default, notices of intent, etc.

    But in a TILA rescission the creditors window is set at 20 days .
    The creditor has no time to play the foreclosure card. If they try to play the foreclosure card then they are further harming the borrower due to tying that borrower up from being able to refinance or sell. The creditor cannot violate the TILA unwinding process by ignoring it, and then expect to prevail later outside their 20 day compliance window.

    The Supreme Court in Jesinoski said the rescission is effected when the letter is mailed.

    And that simple short statement wipes out all of the lenders other tactics employed over the past decades where borrowers were unjustly denied by courts that their rescissions were already in effect before the lender ever filed the foreclosure complaint.

  48. An example of when the servicer acts for creditor-
    No you cant rescind because its only for refi
    ( my answer – yes i can under tila)
    For The third time no you cant
    ( yes i can and you can file for declaratory relief)
    Their answer -” crickets”
    Next JESINOSki
    My answer – told you so
    Awaiting their answer amongst other things
    And thats all i have to say bout that.

  49. Bob G. , I went back and looked at your previous post and now see the point you were making …that the Supreme Court didn’t directly address some or these other issues that we on this board are speculating about in regards to …

    *what constitutes a valid consummation that triggers the 3 years?

    True , I don’t think anyone here is saying they addressed that issue, but the people here are just trying to point out that it could be a valid point of controversy that should allow deeper discovery. Since the Court is saying to go with the plain language of the statute…well our point is that the plain language states “3 years from consummation” meaning that no presumptions should be used by a trial court, but instead lets really identify the real, true point of Consummation. That’s all we are saying. Lets follow the letter of the law, if it says consummation, then lets allow a full trial with full Discovery to flush out whether the Plaintiff can show proof that a legal, valid consummation took place. We want the entire origination to come under close scrutiny, with the burden placed on the party who is attempting to take a persons property.

    If a borrower mails a TILA rescission based on a 3 year disclosure extension ..some here are arguing that the clock doesn’t begin to toll until the actual consummation can be confirmed and validated and authenticated. They are basing this argument on the language of the statute ..basing it on the word “consummation”

    The same is true with a foreclosure based on the word “default”

    Does the Court make the Plaintiff prove a default occurred?

    Why shouldn’t the Court prove a consummation occurred? If it is being challenged by the borrower who rescinded … the borrower is saying to the Court “we don’t know these people who are trying to take our house, we never entered a contract with them, and now they are contesting our rescission by claiming we are outside the 3 year window ..well we are telling the Court these strangers cannot be trusted, if they are claiming we are outside the 3 year window from consummation, then it is their burden to prove it …let them prove beyond a doubt that a valid legal consummation took place since they are the party contesting.

    It’s an interesting argument …and it’s based on the language of the TILA statute ..specifically “3 years from consummation”

    Same with the plain language “20 Days”

    The words either have meaning .. Or they don’t mean what they say.

    The Supreme Court said they mean what they say.

    I think that’s why people are looking for strategies based on Jesinoski due to Scalia saying we should just go with the plain language of the statute …people are now looking at that language and asking the relevant questions .. What consummation? It never happened. If the bank wants to contest my rescission, then let them prove that a valid consummation happened …

    The word “creditor” … who is supposed to comply in 20 days …

    Should a servicer be allowed to act as the creditor in contesting a TILA rescission?

    The Supreme Court didn’t address all of these questions ..but I think the reason people are feeling positive is because they are looking at the words used in THE statute and the fact the Supreme Court relied on the plain language of the statute …that’s the connection with Jesinoski.

  50. Was eating pizza im ashamed to say
    Was supposed to say
    You are correct Dwight

  51. Dwight
    Ypu ate correct
    the CONtract is cancelled

  52. Consumer Rights Defenders handles dozens of motions to dismiss, by Rule 12(b)(6) and otherwise, each month….so, call us today. The strategy is critical and we understand how to assist the pro se litigant. 818.453.3585

  53. I’m sorry if I am mistaken, but I thought during oral arguments the lenders attorney argued that the rescission could not be deemed as “effective” until the disputes were first settled .. meaning any dispute that a lender might raise.

    From a Rod Ciferri post below ….

    But the SCOTUS said the “rescission is effected.”

    It DID NOT SAY “the beginning of the rescission process is effected”.

    Done. Complete. Effected.

    That’s not to say the lender has no remedy thereafter, if it acts in time. If the lender acts in time, THEN the unwinding process COULD look similar to common law rescission if a Courts jurisdiction is invoked. If the lender doesn’t act in time, TILA rescission, in that instance, becomes a one step process. Justice Scalia confirmed its a “unilateral” action .. it is done solely by the borrower, nothing else is needed.

    If the lender doesn’t do its part in a timely manner, the completed rescission should NOT be set aside by a collateral action, because its remedy was fully available and provided for in TILA, and it knowingly gave up its right to the same by not acting pursuant to TILA in a timely fashion ( aka: 20 days)

    The unanimous United States Supreme Court said:

    “The language leaves no doubt that rescission is EFFECTED WHEN the borrower NOTIFIES the creditor of his intention to rescind (capitalized emphasis added).” Jesinoski v. Countrywide, 135 S.Ct. 790, 792 (2015).

    SCOTUS ruled Truth In Lending Act Rescission pursuant to 15 USC 1635 rescission is effected through notice.

    The common law rescission arguments were deemed IRRELEVANT to the TILA rescission question presented by Jesinoski ..they were raised in Countrywide’s brief. SCOTUS thought so much about Countrywide’s common law rescission arguments they demolished them in two sentences.

  54. Bob G

    that was the purpose and result of Jesinoski…
    to settle the differences between the circuits…

    no suit required (yes you can be naked! LOL)

    greg

    now tune into the shows and voice your thoughts OUT LOUD!

    please come on the call tonite…

    a gentle reminder that there is a follow up call to Neil tonite…

    Garfield’s Goose & Friends with your host, greg

    (every Thursday night starting 15 minutes right after Neil’s show)

    Call in at (724) 444-7444 (then use Call ID: 139335) then “0” for guest
    and/or use your computer to blog/type at http://www.talkshoe.com/tc/139335
    6:45 PM Eastern Thursdays (for 60 min)

    please use the phone line to speak and ask questions
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  55. @DWIGHTNJ

    I’m sorry, but none of the issues that you cite below were before the court. The only issue before the court was the Question Presented.
    So it doesn’t really matter what the bank attys argued…none of it was before the court. Nature of notice of rescission was the only issue.
    The briefs and oral argument transcripts are over there as well.

    From the SCOTUS website:

    http://www.supremecourt.gov/qp/13-00684qp.pdf

    13-684 JESINOSKI V. COUNTRYWIDE HOME LOANS
    DECISION BELOW: 729 F.3d 1092
    CERT. GRANTED 4/28/2014
    QUESTION PRESENTED:
    The Truth in Lending Act provides that a borrower “shall have the right to rescind the transaction until midnight of the third business day following . . . the delivery of the information and rescission forms required under this section … by notifying the creditor … of his intention to do so.” 15 U.S.C. § 1635(a). The Act further creates a “[t]ime limit for [the] exercise of [this] right,” providing that the borrower’s “right of rescission shall expire three years after the date of consummation of the transaction” even if the “disclosures required … have not been delivered.” Id. § 1635(f).

    The question presented is:
    Does a borrower exercise his right to rescind a transaction in satisfaction of the requirements of Section 1635 by “notifying the creditor” in writing within three years of the consummation of the transaction, as the Third, Fourth, and Eleventh Circuits have held, or
    must a borrower file a lawsuit within three years of the consummation of the transaction, as the First, Sixth, Eighth, Ninth, and Tenth Circuits have held?

    LOWER COURT CASE NUMBER: 12-2202

  56. please come on the call tonite…

    a gentle reminder that there is a follow up call to Neil tonite…

    Garfield’s Goose & Friends with your host, greg

    (every Thursday night starting 15 minutes right after Neil’s show)

    Call in at (724) 444-7444 (then use Call ID: 139335) then “0” for guest
    and/or use your computer to blog/type at http://www.talkshoe.com/tc/139335
    6:45 PM Eastern Thursdays (for 60 min)

    please use the phone line to speak and ask questions
    computer access will only allow you to hear and type into the blog…

  57. For me, Jesinoski went a lot further than that Bob G., if only in establishing what they expect from the judiciary. We all know that the banks did zilch upon receiving a rescission letter prior to Jesinoski. Why? Because they knew they could get away with it. The same way they’ve ignored QWR’s and other debt validation requests and any other valid questions from mortgagors. Because….quite frankly….they own the place. And they don’t give a shit.

    The way banks, under the court’s (complicity) supervision were demanding borrower tender as a prerequisite to any movement forward was not how the statute was written. It was morphed into that upside down model by a run-away financial system that gets anything it wants in return for campaign cash. Money laundering that would make a cartel proud, ‘cause that’s exactly what it is.

    Rest assured that K Street is already throwing huge amounts of cash at this rescission problem as we speak. As a matter of fact, I know that the Federal Reserve was gearing up to rewrite pesky parts of Reg Z just prior to the Jesinoski ruling, with a table slanting feature towards the creditors, of course. And whatever the fed wants, the fed gets. Nothing is sacred to that bunch, save for the almighty dollar.

    I still can’t believe it was the Fed that was the overseer of the Independent Foreclosure Review Debacle! Independent my ass! And I’m getting way off track here, but someone please tell me why the Federal Reserve, otherwise known as THE BANKSTERS, supposedly an NGO of sorts, has a .gov address. Sneaky bastards…..

  58. In Jesinoski the attorneys for the lender DID argue and raise other defenses that would have made their rescission ineffective …

    They argued to the Court that the borrower had no valid right to rescind

    They argued that the lender disputes the missing disclosures

    They argued that the borrower didn’t tender

    They argued that a lawsuit wasn’t filed by borrowers

    None of the lenders arguments mattered because the TILA statute has two seperate and distinct parts to it …

    Part 1 – The actual rescission. … This is effected by mailing of the letter, there is nothing more to this part, nothing else matters, not tender, not disputed or undisputed, no lawsuit or enforcement required, no court, no judges order, …it voids the loan upon mailing of the letter.

    Part 2 – Unwinding – The remedy offered for the unwinding process …. This unwinding part is not to be confused with the actual rescission that was completed in part 1. … This is simply the available statutory remedy for the 2 sides to use so that no court needs to be involved. This unwinding is predicated on the creditors compliance. This means that for the unwinding remedy to be triggered, the creditor must comply with the plain language of the statute, within 20 days the creditor must comply. If they fail to comply, the rescission in part 1 still stands. If they fail to comply they are in violation of the statutory remedy. When you are in violation and non-compliance of a statute, you have in effect waived your remedies that were available. The remedies depend on compliance, and that compliance is clearly stated as 20 days.

    The unanswered questions that remain. – When a creditor disagrees with a rescission, he cannot throw a hissy-fit, stomping his feet and holding his breath ignoring the rescission until some judge in a foreclosure court sees things his way. That is not the proper way that adults behave when facing a 20 day window in a legal matter. The Bank lawyers need to put on their big boy pants and get busy earning their salary ..they need to act quickly inside the 20 days and file an action seeking to Vacate the rescission in a court of law. A controversy now exists, we have a dispute that arises from a borrowers , the lender by acting in a timely manner can invoke the jurisdiction of the court. Now once a court is involved a judge can possibly be involved in the unwinding process if he finds the borrower had a valid rescission. Or he might find that there was not a valid reason and vacate the rescission.

    The other way a courts jurisdiction is invoked is if the borrower files an enforcement action within 1-year after rescinding. This action to enforce is not to be confused with the actual rescission which already took effect by operation of law. This enforcement is only meant for those borrowers seeking a courts help in forcing the creditor to comply with the unwinding process, remove the lien, cancel the Note, calculate an accurate payoff and offset amount for tender, pay damages for their violations, etc.

    Lastly ..if one year has timed-out ..the borrower should be awarded a quiet title and Declaratory judgment stating that the creditor has no rights now or in the future to come after him for the rescinded loan or the mortgaged property of that loan. They are time-barred.

    As for Modrtgage transactions not being included, this supposedly means that TILA Rescission does not include purchases. The statute protects consumers who refinanced their home.

    As for the 3 years from consummation …this is an area that will be tested by those borrowers who argue that a valid consummation had not occurred, and that they are still within their window to rescind.

    As for the 20 days for creditor to comply or they waive their remedies and defenses? It goes along with the underlying intent of the Act. The lawmakers want the borrower to move ahead and not be victimised by a criminal lender who is violating the lending laws. This Act is not about being fair to corrupt lenders..this isn’t about crying and feeling sad that the poor corrupt lender got caught with his pants down and he can’t run to the courthouse within 20 days ..boo boo. ..TILA Rescission intent was to set free the homeowner from the evil clutches of the banker.

    20 days for the creditor to comply and seek its remedies available.

    Beyond 20 days ??

    The creditor needs to lose due to his failure to act.

    The lenders failure to comply brings harm to the borrower.

    TILA was written to deal with these scumbag banks who seek to harm borrowers. Nobody needs to feel bad if the bank loses based on missing thec20 day window for compliance.

    Citizens all over this nation are forced to respond to courts in timely manners ..20 days to file a motion to reconsider or be time-barred they are told …. 35 days to appeal your case …or it is FINAL.

    Nobody cries tears for the citizens who get run over by the rules and time lines ..the statutes that say 20 days to do this …or you are done.

    The Jesinoski Court didn’t address all of these questions specifically, but in general terms it did address them …when it said “follow the plain language of the statute …and the plain language says 20 days.

  59. a gentle reminder that there is a follow up call to Neil tonite…

    Garfield’s Goose & Friends with your host, greg

    (every Thursday night starting 15 minutes right after Neil’s show)

    Call in at (724) 444-7444 (then use Call ID: 139335) then “0” for guest
    and/or use your computer to blog/type at http://www.talkshoe.com/tc/139335
    6:45 PM Eastern Thursdays (for 60 min)

    please use the phone line to speak and ask questions
    computer access will only allow you to hear and type into the blog…

  60. Alot of thus is what Garfield has posted over and over. Some people here just want to argue against homeowners interest. SC post plainly says common law is subrogated. Residential mortgages not purchase loans. Not commercial, apartments. Just Google the statute plain English even Scalia couldn’t screw with.

  61. I’m not sure that folks here understand what Jesinoski was about. The only issue before the court was when does the rescission take place. Period. The court looked at the plain language of the statute and said it was when the obligor notified the creditor, and that apparently occurs when the rescission notice is dropped in the mail. Fair enough.

    Jesinoski was not about what and when is a loan consummated, or who the creditor is defined to be. It was not about what is a residential mortgage transaction. And it certainly was not about extending the TILA rescission period. The court specifically said that 3 years from the date of the loan consummation is the max.

    Why do you think that the most political court in the land, handed down a unanimous decision? Because it was strictly a matter of statutory interpretation and construction, and the statute was clear and unambiguous. Do you guys really think that if SCOTUS thought that the issue was any of the other aforementioned items, that the decision would have been unanimous ?

  62. Greg…rescission does Not apply to purchase loans.

    Besides who said it was a residential mortgage transaction?
    It was a commercial transaction.
    They are not your ordinary mortgages ….

    Reverse That.

  63. Great link Greg highly appreciated

  64. mn

    on first blush, i must guess that it applies to residential mortgages that are NOT the principle dwelling of the borrower (investment homes?)

  65. Java.. I have yet to receive a payoff.
    I suspect one would provide those to the non borrowing parties…
    THEY TRIED TO SUE UNDER FALSE CLAIMS.

  66. Thursday 29 October 2015

    Have to agree with you, Bob G. That bothered me when I read it, yet no
    mention has been directed to it by NG, nor have I seen any court case
    related to rescission deal with that issue from any bank/court, either.

    § 226.23 Right of rescission.
    (a) Consumer’s right to rescind.
    (1) In a credit transaction in which a security interest is or will be retained or acquired in a consumer’s principal dwelling, each consumer whose ownership interest is or will be subject to the security interest shall have the right to rescind the transaction, except for transactions described in paragraph (f) of this section.[47]

    Footnote(s):
    [47] For purposes of this section, the addition to an existing obligation of a security interest in a consumer’s principal dwelling is a transaction. The right of rescission applies only to the addition of the security interest and not the existing obligation. The creditor shall deliver the notice required by paragraph (b) of this section but need not deliver new material disclosures. Delivery of the required notice shall begin the rescission period.

    (f) Exempt transactions. The right to rescind does not apply to the following:

    (1) A residential mortgage transaction.

    Very confusing because of no mentioning in any court case?

  67. So I got a “loan” from Wells Fargo. They send paperwork saying it was endorsed in blank to some Trust that doesn’t exist. Come to find out after foreclosure and 1099A. It was FANNIE Mae , all along ……since day ONE. Never disclosed until the very end…thry day they owned mortgage note since the ink was still wet. Although they always changed the terminology. Investor. Holder. Owner. Whatever they needed to call themselves on that particular day.
    To say nothing that the scumbags servicer Wells , paperwork always had the incorrect payoff amount which I argued and proved to them after the Fraudclosure ……….ANYONE HERE THINK THAT WE WERE HARMED ????

  68. when mailing a notice of rescission – one must presume they are within the 3 year window from consummation, and allow the lender/servicer/trustee to argue that it is not in a declaratory suit or motion in an ongoing foreclosure case…

    homeowners may lose if they say in their notice the date they think the deal was consummated – leave that alone

    if the lender et. al. does not do this within the time allotted (20 days /1 year & 20 days) they are foreclosed from such action

    the lender certainly may bring a fresh suit in equity based on their allegations but cannot use the note and mortgage as a means of taking the collateral

    any foreclosure which occurred after rescission is void, not voidable and ultra vires of the lender’s or judge’s authority

  69. We can argue TILA till we are blue in the face.
    Until you know what harm they have caused you and/or continue to or the likelihood to do harm…you will keep treading water!

    You get TRO and file motion for SJ to dismiss with prejudice.

  70. great article

    louise, on October 29, 2015 at 11:48 am said:

    Dwight, I found it. Here is the link: http://bryllaw.blogspot.no/2015/10/tila-rescission-how-much-of-game.html

  71. Also, the decision and regs say that the obligor has 3 days or 3 years to rescind under TILA, depending on the circumstances, and then the creditor has 20 days to object (file suit?). So if i’m the alleged creditor, i’m saying that (a) the 3 days/years have expired, (b) the obligor was given all required notices, and, inexplicably (c) the transaction was exempt because it was a residential mortgage transaction. A trial court judge is highly unlikely to attempt to make new law. That’s what appelllate courts are for and, as we’ve seen, even they are reluctant, requiring SCOTUS to step in. So I still don’t see how Jesinoski is going to be of much help to most folks here. And most folks here don’t have $20K for an appeal.

    My guess is that if the Jesinoski’s missed the 3 year window by 1 day, that SCOTUS would still have held that the rescission is effective upon mailing, BUT, that the Jesinoskis were a day late and a dollar short. And I believe that that decision also would have been unanimous.

  72. Common Law

  73. WHERE IT SAYS THE CONTRACT WAS INDUCED UNDER FALSE REPRESENTATIONS CAUSING HARM TO 3RD PARTY S.

  74. Get it in writing..Enforce the bilateral contract. …
    Can Not have it Both Ways…no they cant.

  75. Ok, folks, stop right there. Explain how one can therefore rescind a residential mortgage transaction.

    § 226.23 Right of rescission
    (f) Exemption transactions. The right to rescind does not apply to the following:
    (1) A residential mortgage transaction….

  76. If a conversion does not take place..there is no harm
    Nobody has a claim.
    If a conversion took place….someone was harmed..then kits time to play…”WHACK A MOLE”.

    Not legal advice..hire your own council.

  77. If so required pursuant to the terms of an Advance
    Facility, the Servicer may direct the Trustee (in writing), and if so directed in writing the Trustee
    will directly distribute to the Advance Facility Counterparty (or an Advance Facility Trustee) the
    Advance Reimbursement Amounts payable to the Servicer pursuant to this Agreement.
    Upon the direction of and at the expense of the Servicer, the Trustee agrees to execute
    such acknowledgments, certificates and other documents (in each case, in form and substance
    reasonably satisfactory to such party) prepared and provided by the Servicer recognizing the
    interests of any Advance Facility Counterparty (or an Advance Facility Trustee) in Advance
    Reimbursement Amounts with respect to Facility Advances made by the Servicer. In accordance
    with the terms of this Agreement, the Servicer (and any successor servicer) shall apply proceeds
    received in connection with a liquidation of, or final recovery of amounts under, any mortgage
    loan serviced under this Agreement, as well as any recovery resulting from a partial collection of
    insurance proceeds, liquidation proceeds or condemnation proceeds in respect of any mortgage
    loan, to reimburse any previously unreimbursed Facility Advances with respect to such mortgage
    loan prior to applying such proceeds to the payment of interest and principal on such mortgage
    loan.

  78. Here is the copy & paste of bryllaw article that I mentioned …..

    The unanimous Supreme Court made clear in Jesinoski that the “language [of §1635(a)] leaves no doubt that rescission is effected when the borrower notifies.” Jesinoski v. Countrywide Home Loans, Inc., 574 U.S. ___, 135 S.Ct. 790, at *5 (2015). Thus, “so long as the borrower notifies within three years after the transaction is consummated, his rescission is timely.” Id.

    The phrase “rescission is effected” in the Court’s opinion means that the transaction is rescinded, and that the security interest has become “void upon such a rescission.” 15 U.S.C. § 1635(a). Specifically, in addressing the lender’s argument that a rescission notice alone would not suffice, the Court specifically noted that it “is true that rescission traditionally required . . . that the rescinding party return what he receives before a rescission could be effected.” Id. at *6. But that is not the case under TILA because “it is also true that the Act disclaims the common-law condition precedent to rescission at law” and does not “codif[y] rescission in equity.” Id. Instead, the “clear import of §1635(a) is that a borrower need only provide written notice to a lender in order to exercise his right to rescind”, which exercise results in a “unilaterally rescinded transaction” where “§1635(b) alters the traditional process for unwinding [the] transaction.” Id. at *7. In other words, while it used to be the case that the rescinding party was required to tender “before a rescission could be effected,” id. at *6, “the Act disclaims [that] condition precedent,” so that “the borrower need only provide written notice,” id. at *7, and “rescission is effected when the borrower notifies,” id. at *5. In other words, the exercise of the right to rescind pursuant to statute results in rescission itself.

    Further, it doesn’t matter if the lender disputes the effected rescission. Although the lender in Jesinoski “argue[d] that if the parties dispute the adequacy of the disclosures—and thus the continued availability of the right to rescind—then written notice does not suffice,” the Supreme Court disagreed and remarked that “section 1635(a) nowhere suggests a distinction between disputed and undisputed rescissions.” 135 S. Ct. at *5. The unanimous Supreme Court explained that “the fact that [rescission] can be a consequence of judicial action when §1635(g) is triggered in no way suggests that it can only follow from such action,” and that TILA’s neighboring provisions have “no bearing upon whether and how borrower-rescission under §1635(a) may occur.” Id. at *6. Thus, a lender’s disagreement per se cannot undo a non-judicially effected borrower-rescission triggered by operation of §§1635(a) and (b), just like a borrower’s disagreement with an effected not-judicial foreclosure sale cannot undo such a sale.

    Lastly, both TILA and Jesinoski equate the “exercise of [one’s] right to rescind” with “rescission” of that transaction. Specifically, §1635(b) states that “[w]hen an obligor exercises his right to rescind under subsection (a) [by notifying the creditor], any security interest given by the obligor . . . becomes void upon such a rescission.” The word “such” would be rendered superfluous if the phrase “becomes void upon such a rescission” was not read to refer to the obligor’s exercise of his right to rescind, but was instead converted into the phrase ” becomes upon rescission,” to refer to some later accomplished rescission. However, the statute does not say “becomes void upon rescission,” but rather “becomes void upon such a rescission,” harkening back to the obligor’s exercise of his right and demonstrating that the exercise of the rescission right results in rescission of the transaction.

    The unanimous Jesinoski opinion tracks this structure of TILA and likewise treats the exercise of the right to rescind as rescission itself. See 135 S.Ct. at *5, *7 (“a borrower need only provide written notice to a lender in order to exercise his right to rescind”; “rescission is effected when the borrower notifies”; “so long as the borrower notifies within three years . . ., his rescission is timely”).

    For the above reasons, the statutory scheme and the unanimous Supreme Court are clear that rescission is effected solely by providing the creditor with a notice of rescission, in derogation of the prior “common law practice.” The necessary implication is that, once rescission was effected by operation of the statutory scheme, no judicial action is necessary “to award rescission.” Moreover, where a servicer failed to timely challenge the effected rescission, that rescission stands, just like an accomplished non-judicial sale would stand after the appeal time has passed. To the extent that a servicer wishes to challenge the statutorily-accomplished rescission, it must demonstrate that the Court still has jurisdiction and authority to undo such a rescission and to reinstate the voided security interest. To the extent that a servicer may, in light of the effected rescission, seek modification of the procedures spelled out in §1635(b) and re-order the steps remaining in unwinding the unilaterally rescinded transaction, it must again provide valid reasons for such a judicial modification.

    Indeed,”section 1635(a) nowhere suggests a distinction between disputed and undisputed rescissions.” Jesinoski, 135 S.Ct. at *5. Thus, if for example, the borrower notifies the servicer within three days that they rescinded the loan and the servicer disregards that notice for 20 days, the borrower can then file an action seeking to compel the bank to perform its statutory obligations in order to unwind “such a unilaterally rescinded transaction,” id. at *7.

    All the borrower would need to allege is that (1) they took out a TILA loan, that (2) they notified the servicer within the statutory period of their decision to rescind, and that (3) the servicer did not “return to the obligor any money or property given” and did not “take any action necessary or appropriate to reflect the termination of any security interest created under the transaction.” 15 U.S.C. § 1635(b). Nothing else would need to be alleged because “[w]hen an obligor exercises his right to rescind under subsection (a) of this section [by notifying the creditor], he is not liable for any finance or other charge, and any security interest given by the obligor . . . becomes void upon such a rescission.” Id. In other words, rescission occurs not as a result of judicial action, but by operation of statutory law, namely, sections 1635(a) & (b).

    The same applies to a notification to rescind mailed within 3 years of the consummation of the loan transaction. If the servicer fails to act upon such a notification and the resulting nonjudicial rescission within 20 days as set forth in the statute, it does so at its own peril and puts itself into the same position as an unwitting homeowner who fails to challenge a nonjudicial sale until after it’s already accomplished by operation of the statutory foreclosure scheme.

    The crux of the matter is, the burden is on the servicer (just like it is on the unwitting homeowner post-foreclosure) to challenge the statutorily accomplished rescission.

  79. Bob. I would have to check but I am pretty sure state laws for failure to prosecute apply to All parties who may or may not have been injured.

  80. Type the letters .. bryllaw blog … The article was just posted Oct 28

  81. Maybe someone can find the link that describes how a non-judicial foreclosure occurs once a borrower fails to respond in the time set in the statute. Same for appeals, once you miss the stated time period, it seems the law always deems the party as being out of time.

    In TILA rescission, the actual rescission already occurred with the mailed letter.

    The only thing left after is the remedies for unwinding, but it requires that the creditor act within 20 days.

    So it makes sense that if they fail to act in some way, they are thus waiving their remedies of the unwinding process. That process is predicated on compliance by the creditor. It is available to the creditor for 20 days. This remedy does not last forever, because the Act was written as a protection for borrowers and the lawmakers want the borrowers to be able to move on with their life.

    It would make the Act meaningless and ineffective if the servicer of the loan could just lay back and do nothing and not suffer a consequence.

  82. Dwight, can you give us a link? I have checked the website but nothing on rescission unless you are referring to something else. Thanks

  83. What happened to the creditor? We all see servicers, but we do not see creditors.

  84. Google bryllaw blog …they have the argument laid out nicely.

  85. here it is 12 CFR 226.23 – Right of rescission. https://www.law.cornell.edu/cfr/text/12/226.23

  86. Anyone here have the reg and statute handy that says that the bankster has to object to the rescission and file suit within 20 days, or they waive their defenses?

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