Federal and State Judges Think they Can Overrule the US Supreme Court

Jeff Barnes has put into words what I have been thinking about for several weeks. Barnes is a lawyer who has concentrated on foreclosure defense and has won many cases across the country. He is a good lawyer, which means that he understands how to get traction. So when he complains about Judges, people ought to sit up and take notice.

I think he has hit the nail on the head:

Posted on October 22, 2015

October 22, 2015

In recent months, we have been advised by homeowners in different states that certain Judges in those states have taken the position that decisions by either the Supreme Court of that state or decisions of the United States Supreme Court are not binding on them. Taking such a position violates the Judge’s duties as an officer of the Court, erodes confidence in the judiciary, and renders the public more suspicious of the court system than it already is.

A Judge is duty-bound to follow the “law of the land” whether they agree with it or not. A Judge cannot impose his or her own personal views as to whether the state or US Supreme Court made the correct decision on an issue: when a state Supreme Court or the US Supreme Court decides a specific legal issue, the law is established and Judges must follow it. State supreme courts (other than as so denominated in New York, as the “Supreme Court” is a lower level court in NY) and the US Supreme Court are the highest appellate courts, and their decisions establish “the law of the land”: a state Supreme Court decision establishes the law for that State, while the US Supreme Court establishes the law for the country.

In our experience, the overwhelming majority of Judges are fair, honest, considerate of the position of both sides, and take the law into account when rendering their decisions. The examples below are isolated, but the fact that two such examples have been recently brought to our attention is disturbing.

One of the cases which we were advised of concerned the use of Mr. Barnes’ successful appeal of the MERS issues in the Supreme Court of Montana, which by its decision established that MERS was not the “beneficiary” of a Deed of Trust despite claiming to be so. Although this decision was issued two years ago, the homeowner advised that when that decision was presented to a local Montana county Judge, the Judge took the position that he was not bound by the Supreme Court of Montana’s decision.

Another homeowner advised us that in a prior foreclosure-related hearing before a state court Judge that the Judge told the homeowner that he was not bound by decisions of the United States Supreme Court.

This contempt and disrespect for state Supreme Courts and the US Supreme Court is beyond disconcerting.  There is no reason why homeowners facing foreclosure should be treated adversely when a decision of a state or the US Supreme Court is in favor of them and presented to the Judge. “And Justice for All” means just that: it does not mean “except no justice for homeowners in foreclosure.”

Jeff Barnes, Esq.

see http://foreclosuredefensenationwide.com/?p=612

We see it in many cases involving rescission. It is isn’t that the Judge doesn’t understand. As pointed out by Justice Scalia in the Jesinoski decision the wording of the Federal statute on TILA Rescission could not be more clear and could not be less susceptible to judicial construction. In that unanimous decision of the US Supreme Court in January, 2015, the Court said that like it or not, notice of rescission is effective by operation of law when mailed and nothing else is required to make it effective. The court specifically said that common law rescission is different than the statutory rescission in the Truth in Lending Act.

In fact, the court was perplexed as to how or why any judge would have found otherwise. Thousands of Judges in hundreds of thousands of cases had refused to apply the plain wording of the TILA statute 15 USC 1635. Then came Jesinoski in which the Supreme court said there is no distinction between disputed and undisputed rescissions — they are both effective upon mailing by operation of law. That became the law of the land.

And yet, trial judges and even appellate court are again leaning toward NOT upholding the law and NOT forcing the banks to comply with statute. Many more are “reserving ruling” denying the homeowner remedies that are readily available through TILA Rescission. These courts don’t like TILA rescission. They don’t want to punish the banks for bad behavior. But that is what Congress wanted when they passed TILA 50 years ago.

As many Judges have said in their own written findings and opinions — if you don’t like the law then change it; don’t come to a court of law and expect a judge to change the law. Whether this will lead to some sort of discipline for Judges or simply make them vulnerable to being removed from the bench is unknown. What I do know is that when ordinary people come to realize that the foreclosure crisis could end now, thus stimulating our limping economy, they will likely vote accordingly.

Any Judge who refuses to follow the law as it is written and passed by a legislative body and signed into law by the executive branch (the {President or the Governor) has no right to be on the bench and should resign if his “moral compass” makes following the law so onerous that he or she cannot uphold the laws. In the absence of resignation, then momentum will likely rise and push the agenda of those people who want such judges removed involuntarily. Those Judges are acting against the most basic thrust of our society — that we are a nation of laws and not of men. We have a very well defined process of passing laws and that does not include any one person (on or off the bench) deciding on their own the way the law should read.

Clerks Illegally Bowing to Bank Pressure: Recording the Notice of Interest in Real Property with the Notice of Rescission attached.

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

This is for general information only and contains my general opinions on the subject NOBODY should use this article as a substitute from advance from an attorney licensed in the jurisdiction in which the subject property is located.


The Banks are at it again — using their political power to influence officers of State and County government into refusing to perform ministerial duties required by State statutes.
The Clerks are rejecting any filing of the notice of rescission but some are getting through. It is a good idea to send it in by mail rather than show up in person. It should be a Notice of Interest in Real Property. The letter should appear to be from either a lawyer or title agent. If it looks like a homeowner they will inspect it. If it looks like business as usual then they will ordinarily process it without any scrutiny.

A number of people are gearing up to sue the Clerk for a Writ of Mandamus in order to force the Clerk to accept the recording of the Notice of Interest in Real Property with the Notice of Rescission attached. Before suing, the matter should, in my opinion, be escalated briefly, at least, to the County attorney and give him/her a chance to correct the situation. Any document that is properly filled out with formalities that are required by statute MUST be recorded by the Clerk. The Clerk does not have discretion as to what documents they record and no discretion as to what documents that can’t record.

There is also the possibility of escalating to the Florida Attorney General and the US Attorney General

In the event that the attorneys general or County attorneys ignore or delay it, then the Petition for Writ of Mandamus is probably a viable option. Forms for Writ of Mandamus are online but nobody should do this unless they have an attorney licensed in the correct jurisdiction. The complaint should (my opinion) [comments invited]

  1.  Establish jurisdiction in the State or Federal Court (I would say Federal at first glance), to wit: that TILA Rescission is a Federal Law and that the Clerk is refusing to allow implementation of the rights of the borrower under Federal Law.
  2. The complaint should NOT ask the Court to enter an order that says that the rescission was effective — that is not the proper subject for an issue between the property owner and the clerk.
  3. Establish jurisdiction and description of the parties — the Clerk and the party seeking to record, their residence etc.
  4. The State Law requiring the Clerk to record documents should be quoted verbatim
  5. The allegation should be made that any party with an interest in the real property has the right to record such interest and that the Clerk has not been delegated or authorized to exercise discretion as to whether to accept a properly drafted and executed Notice of Interest in Real Property.
  6. The allegation should be made that the Petitioner is a person, sui juris, with an interest in the real property, to wit: the Petitioner owns the property described on Exhibit “A” legal description and street address).
  7. The allegation should be made that the Petitioner rescinded the mortgage (and note) at page ____ of OR Book _____, as per the notice of rescission attached as Exhibit “B”.
  8. The allegation should be made that the rescission is effective by operation of law, and does not require any judicial determination of whether the rescission was effective or not. 15 USC § 1635 et seq. [Maybe cite Jesinoski]
  9. The allegation should be made that the effect of the rescission is to void the mortgage (and note), by operation of law.
  10. The allegation should be made that under the TILA Rescission statutes, the creditor is required to file a release of the encumbrance, but has failed or refused to do so and has not attempted to vacate the rescission within the time window provided by law (20 days from receipt of the rescission).
  11. The allegation should be made that the said mortgage continues to create the illusion of an encumbrance in the chain of title, thus affecting (preventing) the ability of the Petitioner to sell or refinance the property.
  12. The allegation should be made that in the absence of recording the Notice of Interest in Real Property, with the Notice of rescission attached, the mortgage would remain on record with no document releasing the encumbrance as required by Federal law.
  13. The allegation should be made that the Petitioner properly executed, witnessed and notarized a Notice of Interest in Real Property dated the __ day of ___, 201_ and presented same on the ___ day of ____, 201_ to the Respondent for recording by the Respondent. (see attached Exhibit “C”)
  14. The allegation should be made that the Respondent unlawfully refused to accept the aforestated Notice of Interest in Real Property for recording without any right, justification or excuse.
  15. The allegation should be made that Petitioner was neither granted nor delegated any authority to exercise discretion in the recording of a properly executed, witnessed and notarized Interest in real property.
  16. The demand clause should be something like “Wherefore, Petitioner prays this Honorable Court will enter an order commanding the Clerk of _______ County to accept the Notice of Interest in Real Property with its exhibits and, upon payment of the required fees, record same in the Public Records of ____ County.”
  17. Make sure it is served correctly. Expect the banks to mount some challenge to the suit. But there is nothing that they can say that is legally controlling. All they can do is not like it. If they wanted to seek a court order vacating the rescission they should have done so within the 20 days.


But more importantly it is none of their business — if the Clerk is mandated to record ANY document that fulfills statutory requirements, then the document gets recorded — just like the lis pendens in a foreclosure action — the issue of whether the lis pendens or the lawsuit were wrongfully filed is up to the parties and the courts to fight it out — it is NEVER up to the Clerk. Any argument to the contrary would require an administrative hearing apparatus that does not exist.

Lawyers for Banks: Ignore Rescission at Your Peril

I have received a copy of the comments made at a very recent seminar for lawyers who represent the servicers, trustees and the alleged trusts. While they fail to commit to writing the issues regarding standing to challenge a rescission, the rest of it is pretty much spot on. Their message is that ignoring or even rejecting the rescission by a letter is not a good idea and that anyone who does so, is acting at their own peril.

They also point out, as have others who have been writing on the subject for the last couple of weeks, that the rescission law, as it now stands, makes it perilous to trade in consumer loans, especially mortgage loans.

In short, the other side has come to the same conclusion that I came to in 2007. They don’t like it, but they understand what the TILA rescission statutes say about procedure, and that a unanimous Supreme Court in Jesinoski v Countrywide, essentially puts every mortgage loan “at risk” — an admission with enormous implications. They are not out of strategies to change things but they recognize they have an uphill battle.

The point about standing is, in my opinion, the most important by far. The TILA rescission is effective upon mailing by operation of law. It is a specific statutory remedy with its own procedures, although there is a cryptic provision in there that allows a judge to change the procedures. But in order to do anything about the rescission once it is effective, which means that the note and mortgage are void, the servicers et al must come up with a real creditor — without which they have nobody who has standing. This puts them on the grill. They have been fighting successfully to keep this information from the borrowers under claims of privacy and confidentiality.

Most lawyers are contesting these claims in a timid way. I ask the fundamental question: why not give the name of the real creditor who could show proof of payment and vault the claim to that of a holder in due course, instead of a holder or attorney in fact? I have represented banks in foreclosure actions. If these defenses were thrown at me I would be proactive — I’d show the creditor, show the proof of payment, and shut the borrower down on all of his defenses. Case over. But the truth is that there is no one party or even one single group that can be identified as the creditor, with or without the empty trusts whose names are used to create the illusion of negotiation of instruments under the UCC.

My sources and my understanding of what they did prevents them from even KNOWING the name of the creditor, which of course opens the door for the servicers to keep the money instead of passing it on to a defined creditor. How can this be? We know the homeowner got the benefit of money being put on the table. How hard can it be to determine whose money was put on the table?

The answer is simple even if it is incredible: they cannot identify the name of the creditor becasue (a) they don’t know and (b) because they have no way of figuring it out. At any one time the huge slush funds controlled by the Investment Banker acting as Master servicer for a nonexistent trust (no res), had money going in and out of it in thousands of ways per minute. At whatever the time was that funding traveled to the closing agent through a sham conduit, the banks simply don’t know which investors had money in that fund and what interest any of the investors had in a particular loan. It is like putting different fruits in a blender and setting it on puree. If someone now asks to have the banana that went into the blender, it is impossible to do.

THAT is the problem with standing in foreclosure actions and the same problem exists for challenging rescissions. But in rescission the issue is laid bare — they can’t rely on the void note and void mortgage for standing. They have to show the real transaction.


Our legal history has many examples of enormous errors committed by the Courts that were obvious to some but justified by many. The result is usually mayhem. The cause is a bias toward some underlying fact that was untrue at the time. Some examples include
  1.  the infamous Dred Scott decision where the Supreme Court ruled that a black man is not a person within the meaning of the constitution and therefore could not sue to protect his rights because he was not a citizen by virtue of the FACT that his ancestors had been brought to America as slaves. The underlying bias was considered axiomatically true: that “negroes” were fundamentally subhuman. It took a civil war that took 500,000 casualties and a constitutional amendment to change the results of that decision. We are still dealing with lingering thoughts about whether the color of one’s skin is in any way related to our status as humans, persons and citizens.
  2. the internment of Japanese Americans during World War II. The Supreme Court upheld that decision on the basis of national security. The underlying bias was considered axiomatically true: that people of Japanese descent would have loyalty to the Empire of Japan and not the United States. People of German descent were not interred, probably because they looked more like other Americans. As the war progressed and the military realized that people of Japanese descent were resources rather than enemies, the government came to realize that acknowledging these people as citizens with civil rights was more important than the perception of a nonexistent threat to national security. Americans of Japanese descent proved invaluable in the war effort against Japan.
  3. the Citizens United decision in which the Supreme Court gave the management of corporations a “Second vote” in the court of public opinion. The underlying bias was considered axiomatically true: that entities created on paper were no less important than the rights of real people as citizens. The additional underlying bias was that corporations are better than people.
  4. the hundreds of thousands of decisions from thousands of courts that relied on the fictitious power of the court to rewrite legislation that Judge(s) didn’t like. A current perfect example was reading common law (inferior, legally speaking) precedent to override express statutory procedures for the exercise and effect of statutory rescission under the Federal Truth in Lending Act. Over many years and many courts at the trial and appellate level the Judges didn’t like TILA rescission so they changed the wording of the statute to mean that common law procedures and principles apply — thus requiring the homeowner to file suit in order to make rescission effective, and requiring the tender of money or property to even have standing to rescind. This was contrary to the express provisions of the TILA rescission statute. Approximately 8 million+ people were displaced from their homes because of those decisions and the property records of thousands of counties have been forever debauched, likely requiring some legislative action to clear title on some 80+ million transactions involving tens of trillions of dollars. The underlying bias was considered axiomatically true: that the legislature could not have meant that individuals have as much power as big corporation and they should not have such power. Then the short Supreme Court decision from a unanimous court in Jesinoski v Countrywide made the correction, effectively overturning hundreds of thousands of incorrect decisions. A court may not interpret a statute that is clear on its face. A court may not MAKE the law.
  5. the millions of foreclosures that have been allowed on the premise that the “holder” of a note should get the same treatment as a “holder in due course.” More than 16 million people have been displaced from their homes as a result of an underlying bias that was and often remains axiomatically true: decisions in favor of homeowners would give them a free house and decisions that allow foreclosure protect legitimate creditors. Both “axioms” are as completely wrong as the decisions about TILA Rescission.
It is the last item that I address in this article. A holder in due course is allowed to both plead and prove only the elements of Article 3 of the UCC. Article 3 of the UCC states that a party who purchases negotiable paper in good faith without knowledge of the maker’s defenses and before the terms are breached is presumed to be entitled to relief upon making their prima facie case — which are the elements already listed here. Even if there were irregularities or even fraud at the time of the origination of the loan or at a later time but before the HDC purchased the paper, the HDC will get judgment for the relief demanded. A “holder” (on the other hand) comes in many flavors under Article 3 but they all have one thing in common: they are not holders in due course.
The fundamental error of the courts has been to treat the “holder” as a “holder in due course” at the time of trial. It is true that the holder may survive a motion to dismiss merely by alleging that it is a holder — but fundamental error is being committed at trial where the holder must prove its underlying prima facie case. It should be noted that the requirement of consideration is repeated in Article 9 where it states that a security instrument must be purchased by a successor not merely transferred. So regardless of whether one is proceeding under Article 3 or Article 9, no foreclosure can be allowed without paying real money to a party who actually owned the mortgage. The Courts universally have ignored these provisions under the bias that it is axiomatically true that the party seeking to enforce the paper is so sophisticated and trustworthy that their mere request for relief should result in the relief demanded. This bias is “supported” by an additional bias: that failure to enforce such documents would undermine the entire economy of the country — a policy decision that is not within the province of the courts. And deeper still the bias is that it is axiomatically true that the paper would not exist without the actual existence of monetary transactions for origination and transfer of the paper. These “axioms” are not true.
As a result, courts have regularly rubber-stamped the extreme equitable remedy of foreclosure in favor of a party who has no financial interest in the alleged paper, nor any risk of loss or actual loss. The foreclosures are part of a scheme to make money at the expense of the actual people who are losing money. If this was not true, there would have been thousands of instances in which the “holder” presented the money trail that supposedly was the foundation for the paper that was executed and delivered, destroyed or lost. They never do. If they did, the volume of litigated foreclosure cases would drop to a drizzle. And these parties fight successfully to avoid not only the burden of proof but even the ability of the homeowner to inquire (discovery) about the “transactions” about which the paper is referring — either at origination or in purported transfers. Backdating assignments and endorsements would be unnecessary. “Robo-signing” would also be unnecessary. And the constant flux of new servicer and new trustees would also be unnecessary. Many of these events consist of illegal acts that are routinely ignored by the courts for reasons of bias rather than judicial interpretation.
A holder in due course proves their prima facie case by
a) proffering a witness with personal knowledge
b) proffering testimony that allows the commercial paper to be admitted as evidence (the note). This evidence need only be to the effect that the witness, or his company, physically has possession of the original note and presents it in court.
c) proffering testimony and records showing that the paper (the note) was purchased for good and valuable consideration by the party seeking to enforce it. This means showing proof of payment for the paper like a wire transfer receipt or a cancelled check.
d) proffering testimony and records showing that the mortgage, which is not a negotiable instrument, was purchased withe the note.
e) proffering testimony and records that the transactions were real and in good faith
f) proffering testimony that the purchaser of the paper had no knowledge of the maker’s defenses
g) proffering testimony that no default existed at the time of purchase of the paper.
Because of bias, the Courts, just as they did with TILA rescission, have mostly committed fundamental error by allowing to alleged “holders” a lesser standard of proof than the party who is legitimately in a superior position of being a holder in due course. It starts with a correct decision denying the homeowner’s motion to dismiss but ends up in fundamental error when the court “forgets” that the enforcing party has a factual case to prove beyond mere possession of an instrument they say is the original note.
The holder, in contrast to the holder in due course, is not entitled to any such presumptions at trial, except that they hold with rights to enforce. They don’t hold with automatic rights to win the case however.
A holder proves its prima facie case by
a) proffering a witness with personal knowledge
b) proffering testimony and records that allow the commercial paper to be admitted as evidence (the note). This evidence need only be to the effect that the witness, or his company, physically has possession of the original note and presents it in court.
c) proffering testimony and evidence as to the chain of custody of the paper the party seeks to enforce.
d) proffering testimony and records together with proof of payment of the original transaction (a requirement generally ignored by the courts). This means proof that the original party in the “chain” relied upon by the party seeking to enforce actually funded the alleged “loan” with funds of its own or for which it is responsible (e.g., a real warehouse credit arrangements where the originator bears the risk of loss).
e) proffering testimony and records showing that the paper (note) was purchased for good and valuable consideration by the creditor on whose behalf the party is seeking to enforce it. This means showing proof of payment for the paper like a wire transfer receipt or a cancelled check.
f) proffering testimony and records showing that the mortgage was also purchased by the creditor for good and valuable consideration. This means showing proof of payment for the paper like a wire transfer receipt or a cancelled check.
g) proffering testimony and records that the transactions was real and in good faith
h) proffering testimony that no default existed at the time of purchase of the paper. Otherwise, it wouldn’t be commercial paper and the party seeking to enforce would need to allege and prove  its standing and its prima facie case without benefit of the note or mortgage.
It should be added here that the non-judicial foreclosure states essentially make it even easier for an unrelated party to force the sale of property. Those statutory procedures are wrongly applied leaving the burden of proof as to UCC rights to enforce squarely on the homeowner who in most cases is not even a “borrower” in the technical sense. Such states are allowing parties to obtain a forced sale of property in cases where they would not or should not prevail in a judicial foreclosure. The reason is simple: the procedure for realignment of the parties has been ignored. When a homeowner files an action against the “new trustee” (substituted by virtue of the self proclaimed and unverified status of a third party beneficiary under the note and mortgage), the homeowner is somehow seen as the party who must prove that the prima facie case is untrue (giving the holder the rights of a holder in due course); the homeowner is being required to defend a case that was never filed or alleged. Instead of immediately shifting the burden of proof to the only party that says it has the rights and paperwork to justify the forced sale. This is an unconstitutional aberration of the rights of due process. The analogy would be that a defendant accused of murder must prove he did not commit the crime before the State had any burden to accuse the defendant or put on evidence. Realignment of the parties would comply with the constitution without changing the non-judicial statutes. It would require the challenged party to prove it should be allowed to enforce the forced sale of the property. Any other interpretation requires the the homeowner to disprove a case not yet alleged, much less proven in a prima facie case.

Recording the Rescission

Livinglies Team Services: see GTC HONORS Services, Books and Products


For more information please email us at gtchonors.llblog@gmail.com or call us at 954-495-9867 or 520-405-1688

This is not legal advice on your case. Consult a lawyer who is licensed in the jurisdiction in which the transaction and /or property is located.

LAWYERS AND JUDGES TAKE NOTE: “Section 1635(a) nowhere suggests a distinction between disputed and undisputed rescissions, much less that a lawsuit would be required for the latter.” Justice Scalia, Jesinoski v Countrywide. [EDITOR’S NOTE: The only possible meaning to this is that the homeowner can use a letter and then, if it is disputed, it must BE BROUGHT to A COURT OF COMPETENT JURISDICTION to vacate the rescission. An order that denies a motion to dismiss for lack of jurisdiction based upon the fact that the rescission was sent does nothing to change the fact that the rescission was effective as of the date it was mailed and still is effective by operation of law. The only way it can be removed is with another operation of law that is properly brought by the real party in interest. An order vacating the rescission without any pleading requesting that relief does absolutely nothing except assure that the judge’s order will be reversed. And if the rescission is recorded before the foreclosure judgment (judicial states) or sale (nonjudicial states) the judgment and sale are void respectively.]
 Every state has its own forms and requirements and fees for filing anything in the public records. It is wise to record any rescission that was sent regardless of the timing, in my opinion, but that would be subject to advice from a lawyer in your jurisdiction. Litigation is expected on numerous issues after the nonjudicial cancellation of the loan contract, note and mortgage. Here are some of the issues that might be presented when the rescission is sent and/or recorded:
  1. Since the rescission is effective upon mailing, the loan contract, note, and mortgage are void (not voidable). This means in states whose recording statutes are either “notice” or “hybrid”, anything that transpired after that in which the note or mortgage were used for collection, enforcement or foreclosure are also void. Title would then stay with the homeowner if the homeowner does not know that he/she still has title. Any deed issued in foreclosure would accordingly be a wild deed.
  2. If the state recording statutes are purely “race” then if the notice of rescission was not recorded before the foreclosure, the foreclosure sale and deed might well be binding even if it was “fraudulent” or otherwise wrong or illegal.
  3. State statutes of limitation might effect (limit) the ability to collect damages for trespass or wrongful foreclosure, breach of contract or other common law or statutory remedies. The FDCPA might help depending upon how long it has been since the notice of rescission was sent.
  4. If the notice of rescission is sent and recorded before the foreclosure judgment in judicial states or before the sale in nonjudicial states, then in all states it would appear that the the loan contract, note and mortgage were rendered void at the moment of mailing, by operation of law, which is the same thing as a judge’s order declaring the note and mortgage void.
  5. There is no provision in the TILA rescission statutes that allows any lender, creditor or servicer to contest the rescission with a letter. That power is only given to the borrower. Their subsequent action in proceeding to foreclosure “judgment” should be subject to being vacated because they were obtaining relief based upon a void instrument — the mortgage (and the note).
  6. In a strictly “notice” state, as long as they knew about the rescission the foreclosure is automatically wrongful and actionable, in my opinion. “Notice” might need to include a third party purchaser, who often does know of the existence of the borrower’s defenses and does know about the rescission. The issue here is that at the time of the rescission it was widely and wrongly believed that a lawsuit was necessary to make the rescission effective (i.e., the borrower had to plead and prove a case for rescission under common law rules). TILA rescission is exactly the opposite. So everyone, including appellate courts (other than the Supreme Court of the United States) was proceeding under the wrong assumption.
  7. The action following rescission should not be to establish the effectiveness of the rescission. That is already complete by operation of law.
  8. The action could be enforcement of the rescission if filed within one year of the date of mailing of the rescission. At the end of that period, the borrower is barred from filing an enforcement action and the “lender” assuming they have done nothing, is barred from claiming the debt.
  9. After the expiration of one year from date of mailing of the notice of rescission, the action would be simply for quiet title and perhaps trespass (see above). This action could be brought during the one year period either in lieu of enforcement or with enforcement. An action for injunction preventing the banks, servicers or trustees from attempting to use the void note and mortgage might also be advisable.
  10. If an action for enforcement is brought during the one year period it is important not to plead as though the rescission might not be effective. it is a fact. See Jesinoski. The relief sought is NOT to have a declaration from the court that the rescission was valid. The pleading must assume that it is already legally binding as per 15 USC 1635 et seq and that the only issues remaining are the duties of the “lender” who should not be described as a lender but only someone who has asserted the rights of a lender, holder, mortgagee, beneficiary or servicer or trustee.
  11. An attack on standing is appropriate at every step when the “servicer” or Lender” seeks to challenge the rescission without filing an actual lawsuit or pleading. The banking side of the equation has NOT been granted the power to contest with anything other than some other recognized “operation of law.” The only such exercise would be a lawsuit seeking to vacate the rescission on the grounds that it was wrongful or deficient in some way.
  12. STANDING: This is where most cases will be won or lost. Since the note and mortgage were rendered VOID as of the date of mailing, the party seeking to vacate the rescission would need to plead that they are injured by the rescission, to wit: they are going to lose the ability to enforce a legally binding debt. And they would need to establish standing WITHOUT the note and mortgage, which are void (see above).
  13. Thus the pleader would need to establish themselves as a party who either funded the loan and is still the creditor, or who has purchased the loan from someone who owned the loan because they funded it. This we believe is going to be impossible for the lenders because their money trail leads straight to investors whose money was used improperly and whose money was never paid to the trust that issued the mortgage backed securities. The investors were left out in the cold without a mortgage backed security issued by any entity that had mortgages, without a note and without a mortgage. That leaves them with empty promises from the “Servicer” and no enforcement mechanism to collect from either the borrower or the investment bank. None of that is the fault of the borrower.

The Florida Statute below shows the intent of recording such notices. Using the form that is already approved by statute makes recording a lot easier:

712.05 Effect of filing notice.

(1) A person claiming an interest in land or a homeowners’ association desiring to preserve a covenant or restriction may preserve and protect the same from extinguishment by the operation of this act by filing for record, during the 30-year period immediately following the effective date of the root of title, a written notice in accordance with this chapter. Such notice preserves such claim of right or such covenant or restriction or portion of such covenant or restriction for up to 30 years after filing the notice unless the notice is filed again as required in this chapter. A person’s disability or lack of knowledge of any kind may not delay the commencement of or suspend the running of the 30-year period. Such notice may be filed for record by the claimant or by any other person acting on behalf of a claimant who is:

(a) Under a disability;
(b) Unable to assert a claim on his or her behalf; or
(c) One of a class, but whose identity cannot be established or is uncertain at the time of filing such notice of claim for record.

Such notice may be filed by a homeowners’ association only if the preservation of such covenant or restriction or portion of such covenant or restriction is approved by at least two-thirds of the members of the board of directors of an incorporated homeowners’ association at a meeting for which a notice, stating the meeting’s time and place and containing the statement of marketable title action described in s. 712.06(1)(b), was mailed or hand delivered to members of the homeowners’ association at least 7 days before such meeting. The homeowners’ association or clerk of the circuit court is not required to provide additional notice pursuant to s. 712.06(3). The preceding sentence is intended to clarify existing law.

(2) It shall not be necessary for the owner of the marketable record title, as herein defined, to file a notice to protect his or her marketable record title.
History.s. 5, ch. 63-133; s. 798, ch. 97-102; s. 3, ch. 97-202; s. 1, ch. 2003-79; s. 7, ch. 2014-133.

Bank Lawyer’s Seminar: Rescission Changes Everything

QUOTE FROM SEMINAR: “The bottom Line: Until 3 years have elapsed, a mortgage is only as secure as the lender’s proof of compliance with TILA.”


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


see tila-right-of-recission-041415

From one of my readers, I received the Power Point Presentation given by a law firm representing the banks. It confirms everything I have been saying. It also offers a glimpse of some of the ways they will try to wiggle out of it. Suffice it to say that in addition to losing far more cases than what has been previously been reported, the banks are now stuck with a problem that they can’t fix, to wit: when they try to “securitize” a pool of new loans they cannot say that the deal is done because the borrower could assert a right to rescind triggering a nightmare of problems for all the parties starting with origination. The appetite for mortgage backed securities is almost certainly going to decline or vanish completely.

Key points from seminar: (You would think I was the presenter!)

  1. Mailing the notice is sufficient to cancel the loan, note and mortgage.
  2. No tender of money or property is required
  3. It is risky for lender to ignore notice of rescission
  4. Rescission is really a borrower’s remorse remedy
  5. Bringing suit immediately is the only way to end the issue — but only if you have absolute proof of the loan and the disclosures conforming to TILA. [Editor’s note: any failure to disclose compensation off the books of the “closing” would probably be evidence of non-disclosure on multiple levels]
  6. AFTER the lender has complied with 1635(b) (termination of security interest), after the lender has returned the canceled note and after the lender has complied with 12 CFR 1026.23(d)(2) (Return of any money or property that has been given to anyone) THEN the borrower must tender [Editor’s Note: This imposes a requirement that will put the trusts in immediate conflict with the investors and the facts. In order to “return” the money to borrower somebody has to pay it. The servicers, the banks sand the trusts don’t have any investment in these loans. They have been getting a free ride for years. They can’t go to the investors for the money and ask them so they can only advance the funds and hope they will get it back or just steal it from investors, which looks eerily like the start of mortgage securitizations]
  7. According to TILA the lien is void upon mailing of the notice.
  8. Banks better do their homework and identify all the loans that are not supported by TILA disclosures. [Editor’s note: My observation is that this is approximately 90%-96% of all alleged mortgage loans. As I said in 2007-2008: In my opinion the vast majority of all loans produced void notes and mortgages or were subject to rescission which results in the same thing — cancellation of the note, cancellation of the encumbrance, and disgorgement of all money paid.]

TILA Rescission in a Nutshell

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

NOTE: There are strategic nuances here on when to do what. That is included in our rescission package. Some things are better left unsaid in a public forum. This is not an opinion of law upon which you should rely. You should find an attorney who has studied this issue carefully and then rely on their advice.


On the one hand you have a bunch of lawyers and judges who have studied the remedy of TILA rescission and all of them have come up with a unanimous conclusion: the deal is canceled when a notice of rescission is put in the mail.
On the other hand you have a bunch of judges and lawyers who have not studied the situation and who have arrived at the mistaken conclusion that they may reinterpret the TILA rescission anyway they want and that the rules of common law rescission will be applied.
Who is right? Answer: group #1. How do I know? Because the Supreme Court in the Jesinoski decision has already ruled and there is no higher place to go. The ruling from the US Supreme Court was unanimous which in our highly polarized world is as unusual as the TILA rescission remedy which they affirmed. The Supreme Court is not always right, but it is always final — their ruling is the law of the land. People can differ on whether they were right or wrong in Jesinoski — but either way there is nothing anyone can do about it. Only Congress can change the law.

TILA Rescission is a strategy that should considered in virtually all consumer loan cases. This might involve an enforcement action in Federal Court or State Court. The sooner you send the rescission the sooner the 20 days will expire. It is ONLY after the 20 days that you can take the position that they are in violation of statute and that they have waived any objection to the rescission — unless they file a lawsuit against you seeking to vacate the rescission, which IS effective by operation of law, the moment you drop it in the mailbox.

There are three TILA RESCISSION duties that arise for every lender and one remedy to get out of it. The three duties are (a) return of canceled note (b) filing any papers necessary to remove the mortgage encumbrance from the homeowner’s chain of title and (c) return of all money ever paid by the borrower or to anyone in relation to the loan whether it be for fees, interest, principal or other compensation. If they want to stop these duties from being applied against any of the people in the chain that made allegations of ownership, balance, servicing or default, they must file suit, as a creditor, within 20 days from the date of the notice and get an order within that time that vacates the rescission.

The creditor has 20 days in which to comply. If they don’t comply ( or sue and get a court order) there are the following consequences: (a) they are in violation of statute, subject to an enforcement suit on their duties under rescission (b) they have waived any objection to the rescission that should have been brought as their own lawsuit within the 20 days and (c) if they continue to stonewall their obligations for one year, the creditor (if there is one) waives any right to demand any payment on the rescinded loan — the debt is extinguished along with the previously extinguished note and mortgage. Standing for the lawsuit can only be by way of allegations that they are the true creditor and cannot be based upon the void note and void mortgage because you can’t use a void instrument as the basis for any claim.

Note that the suit to enforce the rescission is NOT a suit to make the rescission effective by operation of law. The cancellation of the note and mortgage has already happened as the Jesinoski decision made abundantly clear. The note and mortgage are void as of the date of mailing of the notice of rescission.

This is a very unusual remedy for borrowers that both judges and lawyers have been misinterpreting for years. The idea that a borrower, on their own, could end a loan involving hundreds of thousands of dollars with a simple letter is NOT what the Judges or lawyers think is the right approach. It doesn’t matter what they think. Congress passed this law and it was signed into law by the President 50 years ago.

The Courts cannot reinterpret it to mean something else without violation of separation of powers between the judiciary and the legislative branches of government.What matters is that It was not until the Jesinoski decision that thousands of Judges and tens of thousands of lawyers were told that they were wrong for the last 15 years. The loan is cancelled by the mailing of the notice of rescission.

TILA Rescission is a specific statutory scheme that is different from common law rescission. What the Judges and lawyers failed to perceive when they started messing around with the interpretation of a perfectly clear statute is that if their approach was upheld, the entire system of nonjudicial foreclosure would be subject to the same reinterpretation. And for those of you who recall in nonjudicial states, the challenges to nonjudicial foreclosures were met by the banks arguing that the courts have no business interpreting a specific statutory scheme that is very clear on its face and can only be overturned if it is deemed unconstitutional on its face or in its application. The banks won, which means borrowers win on the issue of rescission.

The January ruling from a unanimous Supreme Court was unusual unto itself. The opinion written by Justice Scalia was terse and caustic — showing the court’s irritation at having to remind judges and lawyers that there is a basic rule of law that says that the court may not “interpret” a statute that is unambiguous. This statute is clear as it could be. So even if a Judge doesn’t like it or doesn’t believe it should be the law, or doesn’t like the result, the Judge has no choice but to follow the rule of law set forth in TILA, in Reg Z and in the Supreme Court decision issued in January. The only way this can change is if Congress passes a new law.

The key to your rescission strategy is going to be the answer to this question: under what circumstances is the effective date of the rescission delayed or contingent? The answer is none. That answer follows from the fact that the rescission IS effective on the date of mailing BY OPERATION OF LAW. So the issue has already been decided by Congress, the Federal Reserve (reg Z) and the US Supreme Court. Like any order or act that is effective by operation of law, rescission may be vacated — but not ignored. And like other orders or actions that are effective by operation of law, there are limits on the ability to sue for temporary or permanent injunction.
And THE bank or alleged servicer writing a letter to YOU saying that you have no right to rescind means nothing except that they received the notice — just like when you write a letter to them asking them to please not foreclose because you have in fact made all your payments. The banks and servicers ignore those letters and get foreclosure judgments and sale of the property no matter how many letters you write. If you don’t challenge them IN COURT it means nothing.

Once the 20 days has expired you need to consider whether to hire counsel to prosecute the enforcement of the rescission. Those allegations consist of reference to the note and mortgage, the fact that you did rescind the transaction and that the loan contract is canceled and then the fact that the creditors are in default of their obligations under TILA. The upside is that it should result in cancelling the foreclosure case because the mortgage and note will then be void by operation of law. The Court lacks jurisdiction to enter a judgment of foreclosure on a mortgage that is void at the time the court hears the case. The downside is that if you win the enforcement action it is going to result, if they comply, in them sending the canceled note, filing the satisfaction of mortgage and giving you the money that was paid. But THEN the creditor may, for the first time, demand payment on the old loan. [see our rescission package on further details and strategies on this]


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