By William Hudson
Thousands of TILA rescissions have now been filed nationwide. As these cases wind through the judicial system new things are being learned from cases that fail. First of all, if you have ever admitted consummation occurred- you are finished before you get out of the starting gate. In your rescission letter it is best not to refer to the loan as a loan unless you are positive it was. Opposing counsel will attempt to get the homeowner to admit there was consummation by asking, “When did you receive your loan?” Homeowner, “In February 2009”. End of story. The homeowner just admitted that they received a loan when they have no idea that the loan was consummated. Do not admit to things you don’t know.
When enforcing a TILA rescission you don’t ask for permission from the court. Why would you ask for permission to do something that is already done by operation of law?
Next, don’t allow the “lender” to influence the court by trying to get a court to order that the rescission was not effective. Rescission must be presented as FACT. According to Jesinoski the rescission once filed, wrong or right, is complete UNLESS the true creditor challenges the rescission within 20 days.
Rescission must be presented with confidence, with conviction and with the understanding that the highest court in the land made the rules and it is the court’s job to enforce the law.
1. TILA Rescission is an event. It is not a theory, claim or defense. It is a nonjudicial procedural remedy. It is accomplished by mailing a letter. In most cases it is an event that has indisputably already occurred. The effect of TILA Rescission is, as a matter of law and by operation of law, to cancel the loan contract, and to render the note and mortgage void. In a Motion to Dismiss, only the true “lender” can file a lawsuit in FEDERAL court to challenge that the rescission exists but is not effective, despite all law to the contrary. The matter is well settled, to wit: if the rescission exists, it is effective as a matter of law.
2. The effectiveness of a TILA Rescission is not predicated upon any judicial analysis of the likelihood of the borrower’s success if a lawsuit to vacate the rescission is filed by a party with legal standing. Any such interpretation would be opposite to the holding in Jesinoski that the rescission is effective upon mailing, whether disputed or not.
3. Lenders (Servicers) typically will not dispute that rescission has occurred but will instead seek to invoke issues in a case that is not and cannot be heard before any Court, to wit: whether the rescission is effective. Servicers seek to do so through motions in which they deftly avoid the requirement of pleading and proving facts in a proper lawsuit to vacate the rescission, thus depriving the homeowner of their right to raise appropriate defenses to the non-existent lawsuit seeking to vacate the rescission.
4. The “lenders/servicers” are attempting to manipulate the courts into entering an order that would attempt to vacate the rescission when the rescission is already done. Therefore, the lender seeks to have the wrong court assume facts about the consummation of the alleged loan including the date or dates when consummation occurred and the source of funding for the alleged loan. The banks even attempt to persuade the court to assume that disclosures were adequate without evidence that they were. These are questions of fact requiring a lawsuit, discovery and trial. They seek to have courts adopt the premise that the rescission is not effective upon mailing if there are potential defects in the reasoning or actions of the borrower.
The SCOTUS has expressly rejected that argument that rescission is a negotiable action (Jesinoski v Countrywide). SCOTUS clearly stated that the rescission is complete upon mailing, regardless of whether it is disputed or not. Therefore only the TRUE lender with skin in the game can contest or challenge the rescission- but must do so within 20 days. A servicer with no standing at NO POINT can challenge a rescission.
Filed under: foreclosure