| Truth in Lending Act (TILA) Mortgage Rescission | | | | explained to you yet WHY TILA mortgage rescission |
| I was on the phone yesterday with a loss mitigation | | | | is a complete defense to foreclosure. What Reg. Z |
| rep from Washington Mutual Bank. I was calling to get | | | | says (12 C.F.R. § 226.23(d)) is that when a |
| the specific address to send a "Notice of Rescission" | | | | consumer rescinds a transaction, the security interest |
| to for WAMU. Every lender/bank/servicer has specific | | | | giving rise to the right of rescission becomes void and |
| addresses for these types of correspondence. I asked | | | | the consumer is not be liable for any amount, including |
| the lady in Loss Mitigation for the "address that I can | | | | any finance charge (ie. interest or closing costs). |
| send a rescission notice to." At first, she said, "a | | | | Don't know if you caught that but I bolded it for you. |
| what?" "A notice to rescind the loan" I said. "Sir, you | | | | Yes, that's right the mortgage (the security interest) |
| can't rescind a loan" she said. I said, "ma'am, please just | | | | becomes VOID. Further, the borrower is NOT |
| give me the address I can send an official notice to | | | | responsible for ANY finance charge. That means any |
| rescind the loan to." She says, "why? did you just close | | | | all closing costs and interest paid on the loan from |
| on this loan within the last three days because I'm | | | | closing to current is refunded to the borrower as a |
| pretty sure you can't just cancel a loan." I said, "ma'am | | | | credit against the original loan amount. So, let's get to |
| you most certainly can, up to three years from the | | | | the foreclosure defense issue... the mortgage gives the |
| date of closing actually if it's a refinance loan of a | | | | owner of the Note the legal authority to foreclose. If |
| primary residence and there are certain violations of | | | | the mortgage is voided by operation of law, there is no |
| the truth in lending act; but I'm not going to argue with | | | | longer any legal instrument to foreclose on. The |
| you, just give me right address!" This little back and | | | | creditor becomes unsecured just like a credit card |
| forth madness just goes to show how even the bank | | | | creditor; and, by the way, that debt can be discharged |
| servicer employees don't know the law! A legal right to | | | | in a federal bankruptcy court. The security interest has |
| TILA mortgage rescission can extend up to three (3) | | | | been voided by operation of law. Foreclosure |
| years out from the date of closing if: | | | | becomes a legal impossibility. The lenders don't just roll |
| | | | over and go away but if they violated the federal law |
| 1. It's a REFINANCE loan transaction | | | | in your loan transaction, its black and white. It's not |
| 2. It's on your PRIMARY residence | | | | some subjective "he said, she said" issue. It's |
| 3. It was closed in the last THREE years | | | | recognizable and quantifiable and can be adequately |
| 4. A forensic loan audit reveals a MATERIAL | | | | explained in a competent court of jurisdiction. |
| disclosure violation | | | | You absolutely want a forensic loan audit done by a |
| TILA mortgage rescission is a COMPLETE defense to | | | | knowledgeable analyst. Hopefully, this short article will |
| foreclosure. In fact, it is the most POWERFUL | | | | help you see that a valid TILA mortgage rescission is |
| foreclosure defense you could have. Why? When you | | | | the best remedy and defense to foreclosure if you |
| effect a lawful TILA mortgage rescission, you are | | | | qualify for it! |
| literally and legally canceling the loan. Here's exactly | | | | In short, TILA mortgage rescission is the best defense |
| what Regulation Z says, 12 C.F.R. § 226 et seq. | | | | (and really offense) you have to fight foreclosure. The |
| ("Reg. Z") (a) Consumer's right to rescind. (1) In a credit | | | | lender must have committed "material disclosure |
| transaction in which a security interest is or will be | | | | violation(s)" in order for the "extended right to rescind" |
| retained or acquired in a consumer's principal dwelling, | | | | to be afforded to you. Don't let anyone tell you that |
| each consumer whose ownership interest is or will be | | | | any old violation of TILA or RESPA or some state |
| subject to the security interest shall have the right to | | | | statute affords you the right to rescind. I have seen |
| rescind the transaction. (3) ...If the required notice or | | | | too many borrowers/consumers sold this bit of goods |
| material disclosures are not delivered, the right to | | | | by people claiming to be experts or professional |
| rescind shall expire 3 years after consummation... | | | | auditors. The scope of TILA mortgage rescission is |
| TILA mortgage rescission is real. But I haven't | | | | precise but very powerful. |