9th Circuit Creeps Up the Ladder in Hoang TILA Rescission Breakthrough

This case comes the closest yet to the truth about TILA Rescission. And it requires that TILA Rescission be applied — if there is an action to enforce within the statute of limitations covering contract actions in the state in which the property is located.

The court’s conclusion that there must be a statute of limitations is derived from its erroneous assumption AGAIN that TILA rescission is a claim rather an event. Jill Smith has done an outstanding job of moving us toward the final step in TILA REscission, to wit: TILA Rescission is procedural and it is an event. Once delivered it has ended the loan, the note and the mortgage by operation of law, just as the statute says. There is no statute of limitations on an event because it is not a claim.

Only a claim for breach of TILA duties could be subject to a statute of limitations. Failure to file suit, as specifically and expressly pointed out by a unanimous SCOTUS decision in Jesinoski does not affect the effect of TILA rescission. Courts don’t like it but that is the law and now this court has moved up to the precipice of saying exactly that.

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Let us help you plan for trial and draft your foreclosure defense strategy, discovery requests and defense narrative: 202-838-6345. Ask for a Consult.
I provide advice and consultation to many people and lawyers so they can spot the key required elements of a scam — in and out of court. If you have a deal you want skimmed for red flags order the Consult and fill out the REGISTRATION FORM. A few hundred dollars well spent is worth a lifetime of financial ruin.
PLEASE FILL OUT AND SUBMIT OUR FREE REGISTRATION FORM WITHOUT ANY OBLIGATION. OUR PRIVACY POLICY IS THAT WE DON’T USE THE FORM EXCEPT TO SPEAK WITH YOU OR PERFORM WORK FOR YOU. THE INFORMATION ON THE FORMS ARE NOT SOLD NOR LICENSED IN ANY MANNER, SHAPE OR FORM. NO EXCEPTIONS.
Get a Consult and TERA (Title & Encumbrances Analysis and & Report) 202-838-6345 or 954-451-1230. The TERA replaces and greatly enhances the former COTA (Chain of Title Analysis, including a one page summary of Title History and Gaps).
THIS ARTICLE IS NOT A LEGAL OPINION UPON WHICH YOU CAN RELY IN ANY INDIVIDUAL CASE. HIRE A LAWYER.
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Hoang v Bank of America 12-6-18

See also ! Financial Freedom Acquisition LLC v. Standard Bank & Trust Co., 2015 IL 117950

! Financial Freedom Acquisition v Standard Bank -Analysis

! If You Own Your Home in a Land Trust

TILA Rescission is no more a claim than a warranty deed. It just exists. You don’t need to sue periodically because by operation of law (the exact wording of the TILA REscission statute) the deed exists and confirms title. In the same way TILA Rescission eliminated the lien encumbrance, the note and even the loan agreement and replaces it with a statutory “agreement” to unwind the debt.

The note and mortgage remain void throughout any time period after the notice of rescission is sent. This court gets close but veers off what they obviously believe is a radical end result — i.e., that the right to claim the debt expires if the creditor fails to comply with the duties imposed by TILA REscission and refuses to even acknowledge the existence of the rescission. That “radical result” is precisely what is mandated by the statute and the courts have no right to legislate it away. The legislature has that power but not the courts. Simple as that.

Contrary to what this court is saying a demand for injunction (as one would do under authority of a valid warranty deed) is NOT a lawsuit to enforce the rescission. The rescission is already in force. And the note and mortgage no longer exist. A Lawsuit to enforce the rescission would ONLY be a lawsuit that seeks to enforce the statutory duties during the time allowed by the statute of limitations in TILA which everyone agrees does not apply.

Ultimately the statute says that regardless of ANY defense a claimed creditor might have (including limitations which is an affirmative defense) the rescission is effective when delivered (mailed under USPS). Even the three years can only be raised by a party with standing and who can prove it WIThout reference to the note or mortgage. Real facts showing they paid for the debt . Those facts don’t exist and most people know it. But because of the “free house” myth they continue to flout the law and legislature from the bench.

But this case almost gets me over the hump where I can say “I told you so.”

Here are some notable quotes from this very important decision.

If a creditor fails to make required disclosures under the Truth in Lending Act (TILA), borrowers are allowed three years from the loan’s consummation date to rescind certain loans.1 15 U.S.C. § 1635(f). Borrowers may effect that rescission simply by notifying the creditor of their intent to rescind within the three-year period. Jesinoski v. Countrywide Home Loans, 135 S. Ct. 790, 792 (2015). TILA does not include a statute of limitations outlining when an action to enforce such a rescission must be brought

On April 15, 2013 (within the three-year period), Hoang sent the Bank notice of intent to rescind the loan under TILA. The record reflects that the Bank took no action in response to receiving the notice.

Once a borrower rescinds a loan under TILA, the borrower “is not liable for any finance or other charge, and any security interest given by the [borrower] . . . becomes void upon such a rescission.” 15 U.S.C. § 1635(b); see 12 C.F.R. § 226.23(a)(3). Within 20 days after the creditor receives a notice of rescission, the creditor must take steps to wind up the loan. 15 U.S.C. § 1635(b). “Upon the performance of the creditor’s obligations under this section, the [borrower] shall tender the property to the creditor . . . [or] tender its reasonable value.” Id. Once both creditor and borrower have so acted, the loan has been wound up.

However, the Supreme Court altered that usual procedure in Jesinoski. It eliminated the need for a borrower to bring suit within the three-year window to exercise TILA rescission. Instead, “rescission is effected when the borrower notifies the creditor of his intention to rescind.” Jesinoski, 135 S. Ct. at 792. “[S]o long as the borrower notifies within three years after the transaction is consummated, his rescission is timely. The statute does not also require him to sue within three years.”

A party may amend its pleading with the court’s leave, which “[t]he court should freely give . . . when justice so requires.” Fed. R. Civ. P. 15(a)(2). “This policy is to be applied with extreme liberality.” Eminence Capital, LLC v. Aspeon, Inc., 316 F.3d 1048, 1051 (9th Cir. 2003) (internal quotation marks omitted). “Dismissal with prejudice and without leave to amend is not appropriate unless it is clear on de novo review that the complaint could not be saved by amendment.” Id. at 1052. Leave to amend can and should generally be given, even in the absence of such a request by the party. See Ebner v. Fresh, Inc., 838 F.3d 958, 963 (9th Cir. 2016) (“[A] district court should grant leave to amend even if no request to amend the pleading was made, unless it determines that the pleading could not possibly be cured by the allegation of other facts.”).

 

TILA RESCISSION: W.V. Federal District Court:”LENDER” MUST FILE SUIT, DAMAGES AWARDED TO BORROWER

major hat-tip to Charles Cox in Nevada.

Federal Judge’s response to chicken little argument: [2] RMS argues that enforcing the statute as written would upend the mortgage industry. As noted, lending institutions faced with a notice of rescission have many options to protect their interests and ensure that the borrower is able to tender the loan proceeds. Most obviously, creditors may provide the required disclosures to limit the rescission period to three days, when parties are more likely to be able to easily return to the status quo. The Court is unconvinced that creditors will be unable to protect their financial interests if they are required to comply with § 1635 according to its terms.”(e.s.)

And that, my friends is the end of the free house myth and the sky is falling argument for making homeowners pay for bank malfeasance and negligence.

As I have said and predicted, the language of the TILA Rescission statute 15 USC §1635 is clear and unambiguous. This decision will eventually pull the plug on all claims of securitization whether true or false.

The problem for the financial industry is (a) they have no way of actually identifying the debt from the perspective a creditor and (b) therefore they have no creditor to identify. In order to file a claim to change or vacate the notice of rescission they must allege and prove standing without the void note and void mortgage. That requires a creditor.

However this case does not test the three year express limit on TILA rescission. I say that all rescissions are effective by operation of law when delivered (or mailed using USPS) regardless of whether or not the rescission is contested. I say that TILA Rescission creates a procedural hurdle that the banks have been dancing around for over a decade. The three year limitation could be an adequate defense and grounds to vacate the TILA rescission — but only if “someone” asks for it and that “someone” must be a party with standing that does not rely on the void note and void mortgage. This is an issue for another day.

Thre question in this case is whether there will be an appeal and if so, in whose name?

Let us help you plan for trial and draft your foreclosure defense strategy, discovery requests and defense narrative: 202-838-6345. Ask for a Consult.

I provide advice and consent to many people and lawyers so they can spot the key required elements of a scam — in and out of court. If you have a deal you want skimmed for red flags order the Consult and fill out the REGISTRATION FORM. A few hundred dollars well spent is worth a lifetime of financial ruin.

PLEASE FILL OUT AND SUBMIT OUR FREE REGISTRATION FORM WITHOUT ANY OBLIGATION. OUR PRIVACY POLICY IS THAT WE DON’T USE THE FORM EXCEPT TO SPEAK WITH YOU OR PERFORM WORK FOR YOU. THE INFORMATION ON THE FORMS ARE NOT SOLD NOR LICENSED IN ANY MANNER, SHAPE OR FORM. NO EXCEPTIONS.

Get a Consult and TERA (Title & Encumbrances Analysis and & Report) 202-838-6345 or 954-451-1230. The TERA replaces and greatly enhances the former COTA (Chain of Title Analysis, including a one page summary of Title History and Gaps).

THIS ARTICLE IS NOT A LEGAL OPINION UPON WHICH YOU CAN RELY IN ANY INDIVIDUAL CASE. HIRE A LAWYER.

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see LAVIS v. REVERSE MORTGAGE SOLUTIONS LLC Dist

For more discussion on TILA Rescission just use the search bar here on this blog “TILA RESCISSION.”

Without further comment ad nauseum but with at least one well-deserved “I told you so” here are some significant quotes from a West Virginia District Court Judge:

RMS conceded that it could not demonstrate that Ms. Lavis was provided notice of her right to rescind, which extended the time in which Ms. Lavis could exercise that right. Ms. Lavis cites the testimony from RMS’ corporate representative, confirming that it had a copy of her notice of rescission, with a receipt stamp dated May 17, 2016, and that RMS did not release the deeds of trust or file a civil action to maintain the lien within twenty days after that notice.

The Court further finds that RMS failed to preserve any right to tender from Ms. Lavis. Ms. Lavis took all appropriate steps required under the statute to rescind and to protect her rights. Despite its status as a sophisticated entity with access to the expertise of counsel, RMS did nothing in response to Ms. Lavis’ notice of rescission. It did not take steps to terminate her security interest. It did not request that she proffer regarding her ability to tender or submit a request for a specific amount in tender. It did not file suit to preserve its right to tender or to delay its obligation to terminate the security interest pending Ms. Lavis’ demonstration of an ability to tender the loan proceeds. After Ms. Lavis filed this action to enforce her rights, RMS did not file a counterclaim for return of the loan proceeds. It did not file a motion or other response requesting that the Court alter the procedures set forth in 15 U.S.C. § 1635(b). Instead, it continued to insist, even through the end of trial and in its briefings considered here, that it could simply ignore Ms. Lavis’ rescission of the loan.[2](e.s.)

 

The evidence related to rescission was not significantly in dispute, although the parties vigorously dispute the legal implications of the facts. RMS did not provide Ms. Lavis with required disclosures regarding the right to rescind at the loan closing, giving her three years to exercise her right to rescind. Ms. Lavis sent a letter, dated May 12, 2016, informing RMS that she was exercising her right to rescind. Although RMS does not dispute that Ms. Lavis retained the right to rescind, it did nothing in response to the letter. To date, RMS has taken no steps to effectuate rescission or to honor its statutory obligations triggered by Ms. Lavis’ letter.

15 U.S.C. § 1365(b) sets forth the procedures involved in rescission, using mandatory “shall” language. Within twenty days after an obligor exercises the right to rescind, “the creditor shall return to the obligor any money or property given as earnest money, down payment, or otherwise, and shall take any action necessary or appropriate to reflect the termination of any security interest created under the transaction.” 15 U.S.C. § 1635(b) (emphasis added.) This language is not permissive.

The Court has repeatedly held that the clear language of the statute, as well as the Supreme Court’s discussion of the issue in Jesinoski v. Countrywide Home Loans, Inc., demonstrate that, absent a suit or motion to alter the procedures set forth in the statute and regulations, a creditor’s obligation to return funds and terminate the security interest precedes any obligation of the borrower to tender loan proceeds. 135 S.Ct. 790, 793 (2015).

The Court further finds that RMS failed to preserve any right to tender from Ms. Lavis. Ms. Lavis took all appropriate steps required under the statute to rescind and to protect her rights. Despite its status as a sophisticated entity with to the expertise of counsel, RMS did nothing in response to Ms. Lavis’ notice of rescission. It did not take steps to terminate her security interest. It did not request that she proffer regarding her ability to tender or submit a request for a specific amount in tender. It did not file suit to preserve its right to tender or to delay its obligation to terminate the security interest pending Ms. Lavis’ demonstration of an ability to tender the loan proceeds. After Ms. Lavis filed this action to enforce her rights, RMS did not file a counterclaim for return of the loan proceeds. It did not file a motion or other response requesting that the Court alter the procedures set forth in 15 U.S.C. § 1635(b). Instead, it continued to insist, even through the end of trial and in its briefings considered here, that it could simply ignore Ms. Lavis’ rescission of the loan.[2](e.s.)

A finding that RMS is entitled to tender, despite its disregard of its obligations over a period of years and its failure to take any measures to preserve its rights under the statute, would incentivize lending institutions to follow RMS’ poor example.

Statute of Limitations on TILA Rescission: How long does the debt survive after notice of TLA rescission?

The simple answer is that the debt, or the claim on the debt, ends 20 days after notice of rescission. Otherwise the statute 15 U.S.C. §1635 and SCOTUS would have had no meaning when it says that the rescission is effective by operation of law at the time the notice is delivered. It provides a  very short window for “lender’s” compliance.

In reality, I have referred to a one year limitation because the courts are trying to mitigate the punitive intent of the TILA rescission statute. 15 U.S.C. §1640(e) basically leans toward a one year limitation for borrower’s claims against “lenders” based upon disclosure which is what TILA rescission is all about.

The borrower has every right to force compliance and get a court order requiring (a) return of canceled note (b) filing a release and satisfaction of the encumbrance and (c) payment of money to the borrower — but they have no such right after one year has expired starting with the date of the notice or date of delivery.

Employing analysis based upon the goose and the gander, it would follow that the one year limitation would also apply to “lenders” seeking payment from the borrower based upon the statutory requirement that the borrower pays the debt.

If this analysis was adopted as doctrine it would create a window of opportunity for a lender in violation of the three statutory duties under TILA rescission to cure the violation and bring the claim for repayment. This interpretation would be contrary to the wording and intent of the TILA rescission statute — as it would cloud the purpose of the statute — to enable borrowers to get out of the deal they are in and seek a new deal instead. Nobody would lend to the borrower if there was a risk that they might still owe money to a prior lender, even though the law makes the debt unsecured. Nonetheless it is entirely possible that the courts will invent such a doctrine. 

Let us help you plan for trial and draft your foreclosure defense strategy, discovery requests and defense narrative: 202-838-6345. Ask for a Consult.

I provide advice and consent to many people and lawyers so they can spot the key elements of a scam. If you have a deal you want skimmed for red flags order the Consult and fill out the REGISTRATION FORM. A few hundred dollars well spent is worth a lifetime of financial ruin.

PLEASE FILL OUT AND SUBMIT OUR FREE REGISTRATION FORMWITHOUT ANY OBLIGATION. OUR PRIVACY POLICY IS THAT WE DON’T USE THE FORM EXCEPT TO SPEAK WITH YOU OR PERFORM WORK FOR YOU. THE INFORMATION ON THE FORMS ARE NOT SOLD NOR LICENSED IN ANY MANNER, SHAPE OR FORM. NO EXCEPTIONS.

Get a Consult and TERA (Title & Encumbrances Analysis and & Report) 202-838-6345. The TEAR replaces and greatly enhances the former COTA (Chain of Title Analysis, including a one page summary of Title History and Gaps).

THIS ARTICLE IS NOT A LEGAL OPINION UPON WHICH YOU CAN RELY IN ANY INDIVIDUAL CASE. HIRE A LAWYER.

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Any borrower claim based upon a remedy in the TILA statutes has a one year limitation. In TILA rescission, the claim for the debt arises not from the note and mortgage which are void, but from 15 USC §1635. The statute replaces the contract. The “lender” has a claim to collect the debt under that statute. But they must first comply with their three statutory duties before they can demand and then enforce collection of the debt. The debt can be satisfied by tendering title to the home. But a part of the debt is easily satisfied by the payment to the borrower from the Lender.

The confusion arises from the fact that statutory rescission is different from common law rescission. Common law rescission puts tendering payment on the debt first, whereas statutory rescission puts payment of the debt last.
In TILA Rescission, while there is no express limitation provision as to the ability of the lender to collect on the debt, they can never collect the debt unless, within 20 days, they have complied with the three duties set forth in the statutory scheme for statutory rescission. After that they are barred from enforcing the debt. It is intended to be punitive to encourage “lenders” to comply with disclosure requirements.
Theoretically then, they can never collect the debt because they never comply with the three duties that are condition precedent to seeking payment on the debt. So academically speaking the “lender” is barred after 20 days. But realistically the language of the statute leans heavily to one year for claims arising from TILA and that includes rescission although the statute doesn’t say that expressly.
So I have taken the position that they are barred after 20 days from ever expressing a claim on the debt or, if one wants to “interpret” the statute (against the advice of SCOTUS in Jesinoski) the limitation would be one year from the date of rescission or from the last day that “lender” compliance was due. That interpretation would mean, though, that the “lender” had complied with its duties under statutory rescission 15 U.S.C. § 1635.
Lastly there is another academic thread that would state that there is no limitation on the right of the lender to collect the debt as long as they complied with the statute even if it was outside of the 20 day period. This conclusion seems unlikely as it would change the wording in 15 U.S.C. §1635 and render lender’s compliance practically irrelevant. It would insert language into the statute that would mean that the rescission was not effective when mailed and there was nothing the borrower could do about that.

TILA Rescission Time Limits

If you slow down and logically go through the statute and the Jesinoski decision it is easy to analyze the situation and come to a correct conclusion. This is not argument of law, it is the application of logic. SCOTUS and the statute state unequivocally that the rescission is effective WHEN it is mailed, by operation of law. Everything else happens afterwards.

Let us help you plan your TILA rescission strategy, discovery requests and defense narrative: 202-838-6345. Ask for a Consult

PLEASE FILL OUT AND SUBMIT OUR FREE REGISTRATION FORM WITHOUT ANY OBLIGATION. OUR PRIVACY POLICY IS THAT WE DON’T USE THE FORM EXCEPT TO SPEAK WITH YOU OR PERFORM WORK ORDERED BY YOU. THE INFORMATION ON THE FORMS IS NOT SOLD NOR LICENSED IN ANY MANNER, SHAPE OR FORM. NO EXCEPTIONS.

Get a Consult and TERA (Title & Encumbrances Analysis and & Report) 202-838-6345. The TERA replaces and greatly enhances the former COTA (Chain of Title Analysis, including a one page summary of Title History and Gaps).

THIS ARTICLE IS NOT A LEGAL OPINION UPON WHICH YOU CAN RELY IN ANY INDIVIDUAL CASE. HIRE A LAWYER.

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The “three year” limitation is an affirmative defense that only arises AFTER rescission is effective by operation of law. It is only an affirmative act resulting in a court order that can revoke or vacate a TIILA rescission. To state it more bluntly, merely raising a dispute does not mean (a) you have the standing to do so nor (b) that the matter is at issue. The error here is that the parties are usually already in court.
As soon as the court is apprised of the rescission having been sent (whether 10 minutes ago or 10 years ago) the case changes, to wit: any action based upon the note and mortgage must be struck or dismissed.
  • Any party who was pursuing a claim based upon the note and mortgage is out — they no longer have legal standing and the Court no longer has subject matter jurisdiction over their claims or defenses.
  • Any party who is the actual creditor could, within 20 days from notice of rescission, either comply with the statute or file a lawsuit invoking and standing or any other basis upon which they dispute that the rescission was properly sent.
  • Any party failing to invoke the remedy of repayment or the duty of compliance within one year from date of mailing is barred from pursuing any statutory claim.
  • Title stays unchanged as of the date of mailing, to wit: fee simple absolute with no encumbrance of mortgage or deed of trust.
Once the statutory scheme is invoked, everything changes. The statutory scheme replaces the loan agreement just as the statutory scheme for nonjudicial foreclosure replaces the constitutional requirement of due process PROVIDED that the homeowner may still invoke the right to due process. If not, the statutory nonjudicial scheme is all that remains. The same analysis applies when looking at the nonjudicial cancelation of the loan agreement. If the “lender” fails to object with a lawsuit to vacate or revoke the rescission, then the statutory nonjudicial scheme is all that remains.
*
Once TILA rescission is sent, the note and mortgage no longer exist, by operation of law. The courts may not simply apply a note (new or old), much less an encumbrance (new or old) on land by fiat as this deprives the homeowner of his right to due process before his clear title can be taken away from him. Such an act must be preceded by formal application to a court by a party who has legal standing, and a trial occurs producing the court order. That application must be filed within 20 days of notice of rescission.
*
People are pointing to the reference in Jesinoski to the three year limitation. That is dicta — i.e., there is no ruling or opinion on when or whether that defense can be invoked. That defense does not arise by operation of law like the effectiveness of the rescission notice. But we do know by definition that such defenses can only arise after notice of rescission is sent. The argument that SCOTUS said that a notice sent outside the three year period is void is wrong. There is no place in the opinion where the court says that. And it isn’t likely they they will issue such an opinion.
*
The reason is that if SCOTUS were to say that rescission is NOT effective upon mailing if it was mailed beyond the three year limitation, then an added condition is being inserted into the statute. The option stands for exactly the opposite conclusion. No conditions may be added. Period. Any interpretation or ruling that adds a condition means that the rescission is not effective upon mailing by operation of law. Such a ruling inserts “unless….” into the wording of the statute and the ruling of SCOTUS.
*
Lastly, within the context of 15  USC §1635 and Jesinoski, the rescission and simultaneous destruction of the note and mortgage does NOT start a clock on any statute of limitations any more than a Deed starts a clock on a statute of limitations as to the title. But for the same reason it is true that SCOTUS is unlikely to say both a 2008 and 2017 rescission were effective. Once the first rescission was sent (and assuming there is no doubt about that) the loan agreement was canceled; hence, there was nothing to rescind in 2017.

What is the effect of TILA Rescission on My title? Can I sue for damages?

I have been getting the same questions from multiple attorneys and homeowners. One of them is preparing a brief to the U.S. Supreme Court on rescission, but is wondering, as things stand whether she has any right to sue for damages. When our team prepares a complaint or other pleading for a lawyer or homeowner we concentrate on the elements of what needs to be present and the logic of what we are presenting. It must be very compelling or the judge will regard it as just another attempt to get out of justly due debt.

Let us help you plan your foreclosure defense strategy, discovery requests and defense narrative: 202-838-6345. Ask for a Consult

PLEASE FILL OUT AND SUBMIT OUR FREE REGISTRATION FORM WITHOUT ANY OBLIGATION. OUR PRIVACY POLICY IS THAT WE DON’T USE THE FORM EXCEPT TO SPEAK WITH YOU OR PERFORM WORK FOR YOU. THE INFORMATION ON THE FORMS IS NOT SOLD NOR LICENSED IN ANY MANNER, SHAPE OR FORM. NO EXCEPTIONS.

Get a Consult and TEAR (Title & Encumbrances Analysis and & Report) 202-838-6345. The TEAR replaces and greatly enhances the former COTA (Chain of Title Analysis, including a one page summary of Title History and Gaps).

THIS ARTICLE IS NOT A LEGAL OPINION UPON WHICH YOU CAN RELY IN ANY INDIVIDUAL CASE. HIRE A LAWYER.

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Combining fact patterns from multiple inquiries we start with a homeowner who actually sent two notices of rescission (2010 and 2017). Questions vary from who do I sue for damages to how do I get my title back?

Note that the biggest and most common error in rescission litigation is that the homeowner attempts to (a) have the court declare the rescission effective contrary to their own argument that it is already effective by operation of law, 15 USC §1635, and (b) seek to enforce the TILA rescission statutory duties beyond one year after rescission.

Whether you can sue for damages is one question. Whether the rescission had the effect of removing the jurisdiction, right or authority to dispossess you of title is another. And whether title ever changed is yet another. Yes you can sue for damages if not barred by a statute of limitations. Yes authority is vitiated by operation of law regardless of the status of litigation. And NO, title never changed and you probably own your house unless state law restricts your right to claim such ownership.

All three questions are related.
Taking the last question (did title actually change?) first, my opinion is that the rescission was effective when mailed. Therefore the note and mortgage were void. The failure of the alleged “lender” to comply with the rescission duties and then pursue repayment within one year from the date of rescission bars them from pursuing the debt. So at this point in time (equally applicable to the 2017 rescission notice) there is no note, mortgage or enforceable debt.
  • Hence any further activities to enforce the note and mortgage were legally void. And that means that any change of title wherein a party received title via any instrument executed by anyone other than you is equally legally void. In fact, that would be the very definition of a wild deed.
  • The grantor did not have any right, title or interest to convey even if it was a Sheriff, Clerk or Trustee in a deed of trust.
  • Any other interpretation offered by the banks would in substance boil down to arguments about why the rescission notice should not be effective upon mailing, like the statute says and like SCOTUS said 9-0 in Jesinoski.
  • CAUSES OF ACTION would definitely include
    • the equitable remedy of mandatory and prohibitive injunctions to prevent anyone from clouding your title or harassing you for an unenforceable debt would apply. But as we have seen, the trial courts and even the appellate courts refuse to concede that the rescission notice is effective upon mailing by operation of law, voiding the note and mortgage.
    • such a petition could also seek supplemental relief (i.e., monetary damages) and could be pursued as long as the statute of limitations does not bar your claim for damages. This is where it gets academically interesting. You are more likely to be barred if you use the 20010 rescission than you are if you use the 2016 rescission.
    • a lawsuit for misrepresentation (intentional and/or negligent) might also produce a verdict for damages — compensatory and punitive. It can be shown that bank lawyers were publishing all over the internet warning the banks to stop ignoring rescission. They knew. And they did it anyway. Add that to the fact that the foreclosing party was most often a nonexistent trust with no substance to its claim as administrator of the loan, and the case becomes stronger and potentially more lucrative.
    • CLASS ACTION: Mass joinder would probably be the better vehicle but the FTC and AG’s (and other agencies) have bowed to bank pressure and made mass joinder a dirty word. It is the one vehicle that cannot be stopped for failure to certify a class because there is not class — just a group of people who have the same cause fo action with varying damages. The rules for class actions have become increasingly restrictive but it certainly appears that technically the legal elements for certification fo the class are present. It is very expensive for the lawyers, often exceeding $1 million in costs and expenses other than fees.
    • Bottom line is that you legally still own your property but it may take a court to legally unwind all of the wrongful actions undertaken by previous courts at the behest of banks misrepresenting the facts. Legally title never changed, in my opinion.

Taking the second question (the right to dispossess your title) my answer would obviously be in the negative (i.e., NO). Since there was no right to even attempt changing title without the homeowner’s consent and signature, petitions to vacate such actions and for damages would most likely apply.

  • This question is added because the courts are almost certainly going to confuse (intentionally or not) the difference between unauthorized actions and void actions.
  • The proper analysis is obviously that the rescission is effective upon mailing by operation of law.
  • Being effective by operation of law means that the action constitutes an event that has already happened at the moment that the law says it is effective. If a court views this simply as “unauthorized” actions then it will most likely slip back into its original “sin”, to wit: treating rescission as a claim rather than an event that has already transpired.

And lastly the issue of claims for damages. There are different elements to each potential cause of action for damages or supplemental relief. I would group them as negligence, fraud, and breach of statutory duty.

  • As to the last you are barred from enforcing statutory duties in the TILA rescission statute if you are seeking such relief more than one year after rescission. But there are other statutes — RESPA, FDCPA and state statutes that are intended to provide for consumer protection or redress when the statutes are violated. There are statutory limits on the amount of damages that can be awarded to a consumer borrower.
  • Fraud requires specific allegations of misrepresentations — not just an argument that the position taken by the banks and servicers was wrong or even wrongful. It also requires knowledge and intent to deceive. It is harder to prove first because fraud must be proven by clear and convincing evidence which is close to beyond a reasonable doubt. Second it is harder to prove because you must go into “state of mind” of a business entity. The reward for proving fraud is that it might open the door to punitive damages and such awards have been in the millions of dollars.
  • Negligence is the easier to prove that it is more likely than not that the Defendant violated a statutory or common law duty — a duty of care. So the elements are simple — duty, breach of that duty, proximate cause of injury, and the actual injury. Negligent misrepresentation and negligent super vision and gross negligence are popular.

Tonight! Open Rebellion By Inferior Courts Threatens Authority of SCOTUS!

Lecturing Courts on Their Duty to Comply with SCOTUS Decisions

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While the Supreme Court of the United States (SCOTUS)  unanimously (9-0) put to bed all of the arguments against the effectiveness of a notice of rescission under 15 U.S.C. §1635, Jesinoski v. Countrywide Home Loans, 135 S. Ct. 790 (2015), all inferior and lower courts have been ruling the other way. Any dispute raised by anyone, even if they have no legal standing to do so, is taken as an excuse for the lower courts to impose conditions not included in the TILA Rescission statute and banned or barred by SCOTUS.

Join me tonight as we discuss what to do about rebellious judges and how to preserve your interest in real property despite a negative ruling from a trial judge, even if it is affirmed by an appellate court other than SCOTUS, the highest court in the land.

Why Everyone (except SCOTUS) is Wrong About TILA Rescission

All contrary arguments are erroneous since they would insert a contingency where the statute contains no room for any contingency. The language of the statute bars any such contingency when it says that the TILA Rescission is effective upon delivery, by operation of law. If anyone wants the statute to say or mean anything different they must get their remedy from the legislature, not the courts, who have no authority whatsoever to interpret the statute otherwise. The status of any case involving foreclosure is that it does not exist. Hence the court is left ONLY with the power to perform the ministerial act of dismissing the case for lack of jurisdiction.

Let us help you plan your TILA RESCISSION strategy, discovery requests and defense narrative: 202-838-6345. Ask for a Consult.

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Get a Consult and TEAR (Title & Encumbrances Analysis and & Report) 202-838-6345. The TEAR replaces and greatly enhances the former COTA (Chain of Title Analysis, including a one page summary of Title History and Gaps).

https://www.vcita.com/v/lendinglies to schedule CONSULT, leave message or make payments. It’s better than calling!

THIS ARTICLE IS NOT A LEGAL OPINION UPON WHICH YOU CAN RELY IN ANY INDIVIDUAL CASE. HIRE A LAWYER.

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So in answer to questions about putative “modifications”, eviction or unlawful detainer, bankruptcy, and TILA Rescission this is what I have written in response to some inquiries.

Should the rescission be recorded? Not necessarily but

YES. I would like to see it recorded. You need to check with the clerk in the recording office or an attorney who understands recording procedure. Generally recording a document with an old date must be attached to an affidavit that is recorded with the notice of rescission attached. The affidavit explains that the attachment was inadvertently not recorded at the time it was created.

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Should a copy of the notice of rescission be filed in the court record also?

YES. If there is any way to get the recorded document into the court record, it should be pursued.

This presents title issues because if you are recording this long after events have transpired, some of which are also recorded as memorializing transactions, fake or real. Any recorded instruments that purports to be a memorialization of a transaction before the rescission was recorded would generally be given priority.
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The lawyer sent me an answer to my notice of rescission. Now what?
Either file to enforce the duties to be performed (if you are within one year of the date of delivery of the notice of rescission), or file a quiet title action if the one year has expired. There are several different scenarios actually, but this is the one I would focus upon.
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I am getting kicked out of bankruptcy court. Now what?
Getting “kicked out” of BKR court probably means that you are back in the state court system which might open some opportunities for you to get more into the court record. (Like an old rescission).
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My property is being sold. Does that mean that I have to get out?
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They can’t get you out without filing an unlawful detainer (eviction in some jurisdictions) based upon an asserted change of title. There might be a period of time between the sale and the attempt to get you out of the home (eviction or unlawful detainer). If the property is sold to a “third party” they want want rent from you, which could allow you to stay.
The unlawful detainer action presents another opportunity to raise the issue of rescission, since the entire action is based upon a valid change of title. It also sets off potentially another round for appeal, especially on the issue of rescission. Res Judicata and Collateral Estoppel do not apply to jurisdictional issues. If the rescission was mailed then by operation of the law the note and mortgage are void.
The defense is ordinarily that the “sale” was a fabrication based upon fictional claims and was contrary to the notice of rescission, which voided the note and mortgage upon which they were relying. The time for challenging the rescission has long passed. Hence all enforcement actions after the date of the 2009 rescission are void since they were based upon various claims attendant to paper instruments that were void, effective the day of delivery of the rescission.
Note that delivery of TILA Rescission notice is complete when dropped in a USPS mailbox and your testimony that it was sent via US Postal Service is all that is necessary as foundation.
I sent 2 notices of rescissions. Is that better or worse for me?
If I was defending against your claim of rescission I would argue that sending the 2016 rescission was either an admission that the earlier one had not been sent or that it was a concession that, for whatever reason, the 2009 rescission notice had been abandoned.
Hence I suggest you put very little emphasis on the new rescission and maximum emphasis on the old rescission.
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I sent the rescission less than 3 years after the modification but more than 3 years since the alleged consummation. Hoes my rescission affect my loan in that instance?
In most cases “modifications” are not treated as new loans. But the fact that something is called a modification and it really changes everything including the “lender” it may be possible to characterize it as a new loan subject to TILA Rescission. TILA Rescission hinges on whether the “modification” was a new loan — a fact, we would argue — that must be determined by trial. Since intent is part of the analysis of a contract, this could present another opportunity to force them to admit they don’t know the identity or intent of the creditor and whether said creditor had given them authority to make a new contract.
And the underlying narrative for this approach is that as a new contract, the “lender” was required to comply with disclosure requirements at the time of the new contract, thus triggering the three day right of rescission and the the three year limitation. Under my theory, based on Jesinoski, it doesn’t matter whether the three years has expired or not.
We know for certain that the notice of rescission is effective upon mailing; it is not based upon some contingent event or claim or court order. The date of consummation is itself a factual issue that can be in the pleading of the creditor (who is the only one with standing, the note and mortgage having been rendered void) claiming that the notice of rescission should be vacated based upon the three years, the date of consummation etc. 
Any alternative theory that puts the burden on the property owner would be contrary to the express wording of the statute and the SCOTUS ruling in Jesinoski. The statute 15 USC §1635 and SCOTUS are in complete agreement: there is no law suit required to make rescission effective. It would make the statutorily defined TILA Rescission event indefinite, requiring a court ruling before any rescission would be treated seriously. In other words, the opposite of what the statute says and the opposite of what SCOTUS said in Jesinoski. 
All contrary arguments are erroneous since they would insert a contingency where the statute contains no room for any contingency. The language of the statute bars any such contingency when it says that the TILA Rescission is effective upon delivery, by operation of law. If anyone wants the statute to say or mean anything different they must get their remedy from the legislature, not the courts, who have no authority whatsoever to interpret the statute otherwise. The status of any case involving foreclosure is that it does not exist. Hence the court is left ONLY with the power to perform the ministerial act of dismissing the case for lack of jurisdiction.
All this is important because we ought to be heading toward any defensive strategy that reveals the absence of a creditor. We are betting that the fight to conceal the name of the creditor is a cover for not knowing the the identity of the creditor, hence fatally undermining the authority as holder, servicer, trustee or anything else.
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What if consummation never occurred?
It may turn out that consummation between the parties to the note and mortgage never occurred. It’s important to remember that would mean the rescission is irrelevant since the loan contract does not exist. But such a finding by a court of competent jurisdiction would negate the legal effect of the note and mortgage; this is true as long as the note was not purchased for value in good faith by a buyer without knowledge of the borrower’s defenses.
In that case, the burden does shift to the homeowner and it is entirely possible that under that scenario there could be no consummation but nevertheless homeowner liability would continue on the falsely procured note and potentially the mortgage as well. The reason is simple: that is what the State statute says under Article 3 and Article 9 of the UCC, as adopted by all 50 states. The homeowner’s remedy in such a scenario would be limited to actions for damages against the intermediaries who perpetrated the the fraudulent and fictitious “transaction” in which the named lender failed to loan anything.
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