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SEE Rescission of Closed-End Mortgage Loan Transactions

TILA RESCISSION has come to nothing — until now. The Federal Law is clear. “I hereby rescind” is enough to cancel the contract. After that the contract  is over, there is no arbitration clause, and there is no security interest. The “lender” must send the note back cancelled and if they have filed or recorded a security interest, like a mortgage, they must release it by filing a release and reconveyance or a satisfaction of mortgage.

And please don’t forget that TILA is not the only source of legal support for rescission. Any common law or statutory fraud (Federal or State) fraud or even misunderstanding or frustration of purpose could be grounds for rescission including but not limited to fraud in the execution, fraud in the inducement and fraudulent conveyances.

The rescission doesn’t mean you get to keep the money — it just means that the lender doesn’t have the house as collateral and that whatever you owe the lender, must still be paid. There is a conflict of authority as to how you tender payment and when, but you must tender payment — at the latest, after the “lender” complies with the statute. That means the “LENDER” must immediately cancel all documents or file a declaratory action in court naming you as a defendant stating why you should not be permitted to rescind.

There is a time limit (IT WAS 20 DAYS BUT IT MIGHT BE SHORTER UNDER DODD-FRANK) on filing the declaratory action and if they fail to file, then procedurally the matter is concluded. It is sort of like a statute of limitations.

You owe the net amount of principal due to the creditor — you owe that money, less any damages you are entitled to receive, and they can get a judgment or otherwise demand a payment schedule. A Judgment can be converted to a judgment lien which would again put them in the position of a secured creditor but not with the same rights as a “lender.” Despite some recent rulings indicating that the borrower must tender the entire amount loaned in order to have an effective rescission, that is not what the statute says and is not what many other courts have ruled. A payment plan has been sufficient in many cases.

Note that I said “net amount due to the creditor.” It is entirely possible that the net amount is zero or some other figure. They may even owe you money. That might be because of your own payments or the payments proceeds from third party servicer, insurance or credit enhancement proceeds that were paid and remain unaccounted for. This alone is reason enough to defend the claim for immediate tender. If you don’t have the full accounting of all money in and out of the pool and on behalf of the pool claiming ownership of the loan, then you can’t very well tender, can you? And to whom would you tender without complete disclosure which is why you are rescinding (violation of disclosure requirements)?

Rescission does not mean you “give back the house.” You never got the house from the “lender” — you got money from the “lender.” You got the house from the seller of the house. That deal is done (if you got clear title). Cancelling the contract therefore means that you have cancelled the lien and that you will pay the money.  Or, as some courts have indicated you COULD offer the house as payment in full, if that is what you wanted to do. That would be your tender. It was the “lender” who produced the “appraisal” that got you into this mess, therefore they should be stuck with it. This has not been decided by the courts.



41 Responses

  1. It’s now January 2013 for all you TILA rescission posters…and the foreclosure settlements are being covered lightly in the news… Here’s my TILA Rescission story from here in Minnesota. In March of 2007 the wife and I consummated a home refinance with Countrywide Home Loans for two loans. In February of 2009 we found all sorts of TILA violations in both loans, material violation, pushed appraisals, missing paperwork, failed a mortgage audit, etc… and in March 2009 we exercised our three year right of rescission with April 2009 being their 20 day response window. Then we stopped paying for obvious reasons, and due to financial hardship. Then the bank noticed we weren’t paying and began sending notices of default. Just then Countrywide became Bank of America. The rescission was ignored by BoA and Countrywide. Then in May of 2010 the foreclosure by advertisement auction was initiated. BoA denied us a chance for a loan mod. The foreclosure auction kept being postponed. We found out why the auction was being postponed when we were sued by the title company because they lost the MERS mortgage and didn’t have it recorded in the county. At court in Sept 2009 I told the judge that we don’t have a mortgage because it had been rescinded in March 2009. The title company was suing us without a) being licensed in our state, and b) without having a valid mortgage to record, so I wasn’t going to sign new paperwork. The judge sided with plaintiff, gave them a week to get registered and ordered a photocopy of the mortgage to be recorded. He told me to sue BoA if I wanted the enforce TILA. Then the auction happened in June 2010. Then while I was looking for work in another part of America, the house was taken, locks changed, no trespassing/private property signs taken down. New buyer purchased and moved in by June 2011. The window to sue for enforcing the TILA has lapsed. The window for overturning the foreclosure has lapsed. However, the TILA Rescission was recorded in the land record for March 2009. So there is proof no mortgage was recorded. Who wants to help me?

  2. Just this month, the judge granted the SERVICERS Motion For Summary judgement against my rescission suit, which has been ongoing for about 3 years. Her basis: the catastrophic rogue ruling McOmie-Gray v. BofA/Countrywide https://docs.google.com/a/theresabaker.com/viewer?url=http://www.ca9.uscourts.gov/datastore/opinions/2012/02/08/10-16487.pdf

    In McOmie-Gray, the panel of judges ruled that the statute of repose for Rescission is three years, but they also said: IF THE BANK DOES NOT RESPOND TO THE RESCISSION, THEN THE BORROWER MUST BRING A LAWSUIT WITHIN THE THREE YEAR TIME DEADLINE!!! This is beyond ludicrous, and my case exemplifies this:

    I rescinded my mortgage 2 years, eleven months and 28 days after “consummation” for discrepancies found only WEEKS prior in a secret disbursement document between the mortgage broker and the title company that I was able to get my hands on.

    The lender has 20 days to respond to my rescission, which of course they did not. This places my rescission OUTSIDE of the window for rescission, even though I did it properly. By stalling or not responding, the lender effectively disabled my ability to rescind.

    I have read with great interest about situations where equitable tolling may or may not apply to rescission. I have labored to get my attorney to pursue this but he didn’t feel it was worth while. I am struggling with it. The information (blatant fraud, and the stealing of about $18K from us a closing that was hidden) was kept from us. It was not “disclosed”. I was able to obtain the actual disbursement information from the title company and see the actual checks that were cut and the actual disbursement amounts that matched up to the lines on my HUD1 statement. They varied wildly, and were willfully manipulated, and THIS was the reason for my rescission.

    It seems unfair to penalize people for disclosures that were not made.

    I desperately need an attorney who actually believes this is the case to help me. I am in Washington State. In EVERY other aspect, I had a strong case, and was expected to win, and then McOmie-Gray happened. Please contact me if you know of someone. I don’t think there is any hope that we will be able to make until this terrible ruling is overturned, as most think it will be.

  3. First quiet-title victory in Virginia (by default): first-mortgage deed of trust declared null and void:

  4. I hope you kick their a$$e$ long and far. May God’s blessing be with you and keep you well.

  5. @Bart; Good Question!

    One year ago, my husband was expecting to bury me. I have Systemic Scleroderma–supposed to be fatal, and I had spent the last few months unable to walk or take care of myself. He moved us to my daughter’s basement so there would be someone to take care of me during the day, until time to throw dirt over me. This is why we begged the bank for a loan mod. I had severe allergic reactions to man-made medicines, and there was no hope for me. Doctor gave up.
    A good friend searched for a natural cure–20 Mule Team Borax–and now I am almost completely well. I know it sounds weird, me drinking laundry detergent, but it’s a natural compound so it worked when man-made crap almost killed me. Our Creator has a purpose for me obviously, or I’d be taking that dirt nap. I’m not able to lift stuff yet, but when I am built back up, I will be taking posession and God help the banker that tries to take it from me. BEWARE OF OWNER. heh, heh. There is one serious side effect though, it makes you have these uncontrollable urges to kick BANKER ASS, and buy assault rifles.

  6. Cubed@9:01
    You are correct, what you need to do is demand the original credit application with your signature to defeat their claim to represent Cap1.

    They pulled this same shit on my hubby. He demanded in front of the judge that they produce the written agreement. The attorney (who represented a debt buyer, NOT Cap1) mumbled something about not bringing it, but assured the judge “they” had it. The judge says, “Who is THEY, sir?” so he decided right away he’d just dismiss!
    Outside the courtroom, he again asked my husband to make payments of at least $100 a month, and Joe just laughed at him. He quickly signed a dismissal and gave it to the court reporter to file.
    End of story. This debt had been sold multiple times, and over the course of two years, we recieved a dozen letters asking us to affirm the debt. Each time, I wrote back demanding they that produce the original signed contract, and stated that we disputed both the amount due and the standing of the current creditor. They’d added thousands of dollars to a small balance, in order to make it worth pursuing!

    There are a couple of great consumer protection attorneys here, and they are crushing these debt buyers. Many people who felt they had no choice but to file bankrupcy have had their debts discharged with no percentage paid to collectors, because they couldn’t produce the original contract. One attorney made an immediate motion to dismiss the debt collector’s claim, based on lack of a binding, signed agreement and the fact that the creditor named was not the original creditor. At the time, I was unable to walk and Joe was out of work. The judge knew we were in a bad situation, and he said things to the debt collector that made the other people in the room snicker, which embarassed the leach. There were so many cases on the docket of poor, broke people! I think the judge was just tired of hearing roaches try to take more away from them, when they had nothing left. Judges are a significant part of it; presumptions trump everything, and if you make it clear you would pay if you had the means, they usually won’t give a judgement to the opposing party, or they will ask the debt buyer outright to dismiss a pointless claim.
    These credit card suits are a ruse. The original creditor sells them so that they can claim a loss and a tax credit for that loss, and the buyers try to fool people into validating the debt even though it has been discharged. I actually sat down and added up how much we had paid over the months on the debt, and believe it or not, we had overpaid by 25%. I didn’t feel bad at all about default once I started to realize you can’t defeat compounded interest. Everything pertaining to financial transactions in this era is stacked against you as a borrower, including the credit rating agencies, who are used as a threat and a weapon to punish. So the solution is obvious–don’t borrow, pay cash, save for big items and stop being such a “consumer”. When they can’t find any customers, they will cease to exist.

  7. My dear, chances of prevailing are getting better EVERY DAY. JUST NOW AG Coakley announced yet ANOTHER major lawsuit against the big 5 for fraudulent docs/robosigning.

    The winds of change. NOW it is in OUR favor to prolong the process, because every day that goes by, more judges are looking behind the curtain of deceit of the banksters and seeing nothing but ROT.

    On Thanksgiving, we thanked God for NOT going to court with our rescission case when it was enacted over two years ago. We would SURELY have been met with the standard, “WELL? YOU BORROWED THE MONEY RIGHT? WELL, THEN YOU LOSE.”

    FINALLY, they are starting to understand. FINALLY. When they start putting people in prison for the felony fraud and misrepresentation UNDER OATH, THEN we will see some change.

    It was a brilliant move by one of the AG’s to go after NOT the big guys, but the underlings in the firm, and putting THEIR feet to the fire with criminal indictments. NO $12/hr employee is going to protect their bosses by going to prison, they are going ROLL and tell the REAL STORY. It’s happening as we speak… We just have to live long enough.

    Many times, I am not sure we will, but others… I feel very optimistic. HANG IN THERE!

  8. That sums it up perfectly. This has been a full time endeavor for me over the last 10 months and nothing but my pure stubborness has helped get me this far. I even had legal aid turn me down and BoA has had 4 different attorneys from 3 different firms coming at me. It is not just the process of the fight but getting up to speed on the law, procedures, securitization and everything else most of us know nothing about. It is like a fight where I have a pistol and BoA has a nuke. Chances are slim that I’ll prevail…but God does work in mysterious ways 🙂

  9. In my opinion, the BIGGEST reason that more of these aren’t going on is COST and AVAILABILITY of legal representation.

    You cannot realistically expect to take on the fallout of extended litigation against the fraudsters battalions of attorneys PRO SE. You MUST get HIGHLY UP-TO-SPEED legal council, and that is a BIG challenge. There are still only a very FEW attorneys that REALLY understand how to dance this dance in court. Those attorneys are:
    A. EXTREMELY busy and usually only taking slam-dunk, winning cases (I don’t blame them)
    B. EXTREMELY expensive. There is no “Pro Bono” opportunity in this type of litigation, it is by statute that attorneys must be paid by the borrower as the litigation proceeds. IT’S A LOT OF MONEY!!! The banks know this and intentionally draw out the process because it drains your bank account.

    If you took this big roadblock away, you would see MANY more rescission cases, I believe.

  10. There’s alot of meat in this post on this subject and I for one feel that if they want to prevent an outright landslide that these request’s should be taken in the seriousness that they are. The problems get only deeper and wider if they ignoir the reqests and damages pile up on top of the matter and can have a totally different settlement reqiurement over and above. The 20 day window is law and the property owner is the true owner and is due damages and recourse.

  11. Nora C, why don’t you take possession of YOUR house again. That’s your money sitting there?

  12. I am standing on the Sesame Street to learn both the Main Street and the Wall Street.

    I am a 99 percent in the U.S. to protect my interests and others who are suffering from abuses of the corrupt system. Thanks for Neil and bloggers here to give me opportunities to learn and to fight.

  13. Thanks Neil. Remember this one?

    We gotta call the Court and get the whole enchilada…. the Motions, everything. I can’t believe I was able to get what I did get… I cross referenced it on Lexis and NOTHING….. because they don’t report too many cases that are adverse to the banks. Even the cases that show up online that are good for the little people are “unreported” or “unpublished” opinions so that the Defense counsel can give a jab at it. It’s still good law but comes with a chip on it.

    Complete ***t

    1:89-cv-02465 Comerica Bank-Detroi v. Dawson-Price
    James F. Holderman, presiding
    Date filed: 03/27/1989
    Date terminated: 10/11/1990
    Date of last filing: 10/11/1990

    Full docket text for document 51:
    MINUTE ORDER of 10/11/90 before Honorable James F. Holderman : Judgment is entered as follows: Enter memorandum opinion and order that defendant’s motion for summary judgment on the complaint is granted and plaintiff’s cross-motion for summary judgment is denied. To the extent that Ms. Price’s motion for summary judgment on her counterclaim seeks a declaration that she is not obligated to Comerica under the Price Note, her motion is moot and Comerica’s cross-motion is denied. To the extent that Ms. Price’s motion for summary judgment on her counterclaim seeks a civil penalty, costs and attorney’s fees under the Truth In Lending Act, her motion is denied and Comerica’s cross-motion is granted. This cause of action is dismissed in its entirety. There being no just reason for delay, this is a final and appealable order. (For further detail see order attached to the original minute order form.) Notice mailed 10/11/90 (vmj)


    Meanwhile LPS Notary Tracy Lawrence, 43 is dead….



    Quel Coincidence! LPS Notary Tracy Lawrence and key witness is dead at 43.

    And I thought I had it rough because U.S. Senator Kelly Ayotte and Nashua PD merely refuse to investigate the forgery of my name to a mortgage, watch the short film. Anyway from Reuters:
    She had pleaded guilty to falsely notarizing Trafford’s signature, affixing her official stamp to his signature even though he wasn’t present. Lawrence was due to be sentenced Monday on the single count, and the attorney general’s office had agreed to support her lawyer’s request for probation. But Lawrence failed to appear in court for the sentencing. The attorney general’s office called the police, who went to Lawrence’s apartment and discovered the body, Las Vegas Police Sergeant Matthew Sanford confirmed……[snip]

  14. I keep saying that things are looking up. The site below gives pages and pages of successful defenses in which banks took a beating.

    Two years ago, it was unheard of. Last January, finding winning cases was pretty damn hard.

    Barnes, however, does warn of something very troublesome: 4 millions foreclosures are expect to be initiated in the next few months.


    That site is good as it gives news concerning every state.

  15. on an earlier posting. this was said—————so to TMT and Mahir Soliman——————

    TMT, on November 29, 2011 at 8:43 pm said:
    USA stands for United Securitization of America….
    Whoever you are –
    I have yet to see or witness such a profound and absolute dead on statement – Your on it here …Your sitting on the answer to these foreclosure defenses – more than you will ever know….More than you will ever know. . . Dead on !


    That does indeed sum it up.


    so I will say it again———-

    stay away from the BIG banks,,,,,,,,,,,

    and we can take america back.

    And globally, we can trade with people that offer real products in exchange for money.
    And we can be happy

    . The China man selling his wears to us and vice versa is not a problem. The problem is the global banks, the central banks, they are the manipulators of money. All leveraged based on debt, IOU’s, promises to pay. When in fact every global government can issued the money, the credit, the iou’s. Why have all governments given this right to central banks? Why? So they via Government which they have taken over can collect taxes? And thus control.

  16. that’s my real life story on Cap 1 lawsuit, we will see. My first time into the court system.

  17. so Nora——-

    In my cap 1 credit card lawsuit against me…………

    they filed the complaint,

    I filed an answer.

    In Calif, first case managemnet conference is 14 dec, 2011. I filed all my papers, they did.

    I keep getting phone calls from the lawyer representing cap 1 to call them back.

    Funny, all intimidation designed.

    Why should I call them back? They sued me, right. But they want to offer a settlement. I no want to offer a settlement, why did they sue me and why call me?. They, the law firm represintating cap 1, are in fact not representating cap 1, they are are a debt collector, who bought the debt. How do I know, because every letter from them states we are collecting a debt. No law firm representing an original creditor need state that, think your home mortgages as an aside.

    Oh, what slimy bastards.

    And that is why they, the law firm, keeps calling me. To try to get me to settle, because they bought the debt, and it was never assigned.

    I ain’t falling for their bluff. I will fight it to the end. Why, because I see what is happening. It is all because they hope one does not know or is afraid.

    We will see. And I will post my results in upcoming posts as time marches on.

  18. No one mentioned the Equitable Tolling Clause. You have one year from the discovery of FRAUD in your loan to rescind your loan, regardless of when you discovered there was fraud. There is no SOL on fraud. This means that if you had a forensic audit done seven years after you got your “loan”, and the audit showed clear evidence of fraud in origination, you could still rescind your loan under the Equitable Tolling clause, which means that the clock starts ticking when the fraud is discovered.
    There is also the condition that if the “loan” was a purchase money loan, you cannot demand that it be rescinded. This is what my lender did. When I demanded repayment of all the money I had paid over the years on the basis of appraisal fraud and other violations, they sent a letter a few weeks later saying that they wouldn’t rescind. In Georgia, where the house was, the lender has twenty days to respond to your demand, or they not only forfeit the money, you get to keep the house and they have no recourse. My debt was discharged in Chapter 7. They are now up shit crik with no paddle, and can’t foreclose. The house has been empty for over a year, and yet they have not tried to take possession of it, or file any further foreclosure actions on it.

  19. Hi K;
    Here is the FUNNY part.


    You are not sending them a “question” for them to respond to, and they are hoping that most borrowers don’t know that.

    RESCISSION IS AN ENACTMENT, it is absolute, and final. They have NO CHOICE in the matter. They have two options:
    1. Rescind per the law.
    2. File a declaratory action with the court to protest the right to rescind.

    That’s it. Sadly, most borrowers do not know this. When they send a letter “denying” the rescission… they have just violated it, and made you money. The act of not responding to a rescission IN ITSELF validates the rescission!!! Think about that for a minute.

  20. Shelley Erickson,

    They have an obligation to respond — and TRUTHFULLY. And, always there is Fraud Upon the Court — no SOL for this.

    Non-judicial states are still entitled to protection by federal law. Federal law preempts state laws. All are entitled to challenge by TILA violations. Problem is courts will immediately look at SOL and discard unless you are timely. And, if not timely — bring in the TILA Amendment along with all other TILA violations (because Neil is right -NO BAR TO RESCISSION IF YOU STILL DON’T KNOW WHO THE IDENTITY OF THE REAL CREDITOR AT THE TIME OF CLOSING.). But, the TILA Amendment is powerful if you use the Fed Res Opinion in conjunction as to definition of creditor and disclosure of creditor. This is why I argue so hard with Neil that the security investors are not the creditor (sorry Neil — my one big beef with you – while you may have sympathy for security investors — they are not homeowners creditor — and you cannot name them in a TILA violation).

    Have never seen the TILA Amendment utilized in court IN conjunction with the Fed Res Opinion (need both). If that happens, and I am proved wrong — so be it. Till then……

  21. Here is some info on it: e: HUGE BREAKING NEWS! TILA Rescission Success Without Tender In 9th Circuit Court!!
    When a borrower exercises his three day right to cancel, the mortgage is RESCINDED, or UNDONE. EVERY mortgage (and most loans) come with a right to rescind. In CERTAIN circumstances, for CERTAIN specific material disclosure violations, your right to cancel is extended to THREE YEARS!!! These are very specific violations, but luckily, in predatory mortgages, very commonly wrong. There is a great post on this forum about this which you can read here:

    When you send in your desire to cancel your loan (and I did), the loan ceases to be tied to your home by LAW. Within 20 days, the lender must REMOVE the lien from your home, and return to you ALL money paid in connection with it: interest, closing costs, ALL fees (even if not paid to them). As you would expect, this can run into tens of thousands if not more, dollars in three years. IF they want to dispute the rescission, there is ONLY ONE ACTION they can take, and that is to file an objection with the court. They may NOT respond to YOU about it, they may not dispute it to you, they may not IGNORE it, that is an unacceptable response, and in so doing, FURTHER violates the Truth In Lending Act.

    Upon completing the required steps of rescinding the mortgage (IF they do, most don’t), the lender will then ask for you to TENDER the proceeds of the loan. That is, ALL of the money they loaned you, MINUS the fees and interest. Usually, that is in the form of an adjusted statement of what you owe on the house. You must pay them this money very soon after they demand it. IT IS IMPORTANT TO NOTE that your mortgage, UPON SENDING THE NOTICE TO YOUR LENDER, is ***VOID*** and they cannot legally foreclose on you, though they will certainly try. It is SELF ENFORCING. It doesn’t matter whether they object to it, they must rescind. PERIOD.

    Now, in the 9th Circuit Court, there was a case (Yamamoto vs The Bank of NY) in which the judge ruled that the ability to rescind would be based on the borrowers ABILITY TO TENDER the loan. This was a very controversial decision because it went AGAINST the letter of the law, and it effectively halted the ability fo rescission to most borrowers… us included. WHO has a couple hundred thousand dollars lying around?

    NOW the dreaded Yamamoto case has finally been overturned!
    It means that if you have a TILA violation in your mortgage docs that extends your right to rescind to three years, you then have the ability to rescind your mortgage, and the unpaid tender becomes UNSECURED DEBT. It carries the exact same collectability as any OTHER unsecured debt, and if you have declared bankruptcy since getting your loan or after rescinding, IT IS DISCHARGED IN Chapter 7. YOU OWE THE LENDER THIS MONEY, and it is your responsibility to pay it, but they CANNOT take your home to get it. They have the same ability to collect as a credit card company.

    This is potentially VERY big news indeed. I expect it will bring far more lenders to the table to negotiate SAVING a mortgage. They have been hiding behind the Yamamoto curtain all these years, arrogantly knowing that they can be very cavalier by ignoring rescissions, because they won’t make it through court. THOSE DAYS ARE OVER!!!!! It’s wonderful news.
    Reply With Quote
    03-18-2010 #4
    Senior Member

    Join Date
    Aug 2009
    Re: HUGE BREAKING NEWS! TILA Rescission Success Without Tender In 9th Circuit Court!!
    You got me thinking I might be able to do something like this on my second, Social. Thanks for posting, and when I have more time I’ll go through my paperwork. Certainly can’t hurt to check it out.
    Reply With Quote
    03-18-2010 #5
    Social Apocalypse
    Senior Member

    Join Date
    Mar 2009
    Washington State
    Re: HUGE BREAKING NEWS! TILA Rescission Success Without Tender In 9th Circuit Court!!
    Do Garry DO!! They can only be off by $100 on their finance charges! All of the errors will be on that ONE document, the Truth In Lending Disclosure in the boxes across the top.

    It’s a violation to not put “MONTHLY” with the payment schedule, actually, and a lot didn’t.

    You can imagine how quickly $100 would appear when a small error is amortized over THIRTY YEARS.

    If the rescission is raised in foreclosure defense, that limit dwarfs to THIRTY FIVE DOLLARS!

    Good luck!
    Reply With Quote
    03-18-2010 #6
    Senior Member

    Join Date
    Jan 2009
    Re: HUGE BREAKING NEWS! TILA Rescission Success Without Tender In 9th Circuit Court!!
    Love it…
    Love it…
    Love it…

  22. What happened to Recission without tender?HUGE BREAKING NEWS! TILA Rescission Success Without Tender In 9th …
    http://www.loansafe.org/…/25591-huge-breaking-news-tila-rescission-succ…Mar 18, 2010 – TILA Rescission Success Without Tender – WOO HOO!!! Happy Days! Celebrating here in the 9th Circuit Court!!! FINALLY we have justice done!

  23. Can one do a TILA Rescission after a trustee sale, say in a non-judicial foreclosure?

  24. It’s about time that this has taken place…..now no one gets exposed and settlements can be done in private. We are making progess…….

  25. Annonymous, look at the Doctrine of Laches, when you give notice to prove representation and or notice to notify who the lender is by the dispute of dept notice afforded by the FDCPA and or the Qualified writen request letter, after the twenty days the doctrine of Laches should apply and timebarr the equity (true lender ) that is not disclosed or had not made joinder to the suit, or answered to the letter which all the above have happened in my law suit then the true lender should be tiimebarred pursuant the doctrine of laches, am I wrong or correct? And the imposters have violated the Doctrine of Ultra Vires.

  26. Does this not make it an unsecured debt also? And if it has been unsecured which I have believed all along and it is over three years in my state and less for others it would be timebarred from collection if the debt if the homeowner has not paid a payment for three years, in Delaware it is two years. Debt collectors have been trying to collect this debt already and it is by the FDCPA rules already. Fannie and Freddie can not accept notes because if any of the notes are the original they know it is securities fraud to my way of thinking is why they have given the servicing rights to debt collectors to pretent they are authorized to collect the debt, to prevent the securities fraud, since the note(check) was cashed and put into securities and then stocks. It would be cashing the check at least twice with proof. This is why the notes (checks ) were shredded. Most people can timebarred the promissory note/mortgage and deed if trust from the day they signed the papers because the contract was breached that day and timebarr the debt as uncollectable in six years my state and two years Delaware statutes.

  27. Carie

    Agree with Neil’s last paragraph in blue — as to rescission and TILA and SOL. Rescission is a part of TILA that is considered a Statute of Repose — thus, no discovery time allowed to bring claim (max is 3 years from origination and only with proof of general TILA violations). However, that assumes the contract was valid – with only TILA violations (and they are specific). Supreme Court has not completely addressed, but implies that if there is fraudulent concealment then Statute of Repose MAY be extended. .Thus, no definitive answer from Supreme Court.

    And, once that “disclosure” is opened ……. so is the pandora’s box.

    And, I would add to this something that I have been emphasizing for quite some time ,and that is the 2009 TILA Amendment that demands creditor identification. And, again, security investors are not the creditor — as clarified by the Fed Res Opinion (November 2009) to the Amendment, which is now CODIFIED RULE to the law. .

    Courts go by the law. If you are to win, you need to know what law the courts will look at. TILA — is a big one. EVIDENCE is not a violation of the law — it supports the violation of the law. Fraud and Breach of Contract — also good ones.

    Need to put the violation of the law before supporting evidence of the violation.

    I am not an attorney, but Neil is right here, what wins is where the law is carefully looked at. Courts do not care about personal assault or personal speculation. They want to see at least the question of violation of the law — then you bring in the evidence. But, of course if they are already violating the TILA Amendment — that is evidence in itself. .

  28. Good post. Still do not know identity.

    And, remember, if loan was a subprime refinance, this was just a modification of false default debt. Thus, the “lender” was actually the SAME as the prior mortgage “lender” (although you will have to figure out who that was too). – and it is not the stated party at the last refinance. So — within SOL even if you name the last “stated” mortgage company — as they were not the “lender” on your false mortgage. . Lender to false collection rights (that they like to call a mortgage) is unidentified.

    Note, security investors are not liable to rescind a mortgage. Security investors cannot rescind anything. Remember, Neil?? Talked about this a long time ago. Homeowners rights to the law. Security investors are not part of consumer laws.

    Homeowners have been losing in court because they do not have all information. They have no information as it is concealed. .

  29. FHA Gears Up for Claims.

    FHA-approved servicers are completing just 10,000 foreclosures a month due to bottlenecks caused by the robo-signing scandal. But settlements with state attorneys general and compliance with regulatory consent orders are expected to free up that pipeline and FHA now expects to pay a slew of claims on defaulted loans next year.

    FHA, for fiscal year 2012 (which started Oct. 1), is projecting it will pay $35.7 billion in lender claims, more than double the $14.9 billion it ponied up the year before.The government’s mortgage insurer has a pipeline of nearly 136,500 single-family loans in the foreclosure process with 34,000 units sitting there for more than 12 months.

    “Current expectations are that claims could come in very large numbers” in FY 2012, according to a new Department of Housing and Urban Development report on the condition of the FHA Mutual Mortgage Insurance Fund. This payout will reduce FHA capital resources to $13 billion, down from $33.7 billion at the end of FY 2011. Those capital resources include a slim capital ratio of 0.24%, or $2.5 billion, according to a separate report conducted by independent actuaries. (Its book of business exceeds $1 trillion.)

    The remaining $31.2 billion in capital reserves was created to pay expected claims on legacy loans, including mortgages trapped in the foreclosure pipeline. Despite the large anticipated payouts, independent actuaries are projecting the FHA fund will reach its statutory minimum 2% capital ratio in FY 2014.

    That belief is based on projections of higher revenue going forward due to the superior performance of FHA loans originated since 2008 and recent changes in FHA’s mortgage insurance premiums. FHA slashed its 2.25% upfront premium to 1% and doubled its annual premium to 115 basis points to capture more revenue during the life of the loan. “Over time, premium collections under the new rates established in FY 2011will be larger than they would have been otherwise,” HUD says. “This is reflected in the projections made by the independent actuaries.”

    But this premium structure is now binding on FHA due to its thinly capitalized $1.1 trillion mortgage portfolio—and the agency is reluctant to make changes even if it would increase refinancings of underwater FHA borrowers.

    FHA lenders have been complaining that the premiums coupled with a net benefits test is making it difficult to refinance borrowers even at today’s low mortgage rates. “That’s something we are looking into,” FHA acting commissioner Carol Galante told reporters during a briefing on the actuarial report. “Our actuarial report and our budget projections are based on the premiums we currently have in place. Changing that calculus would also change our trajectory in terms of revenue. And we need to be mindful of that.”

    Meanwhile, many are skeptical that FHA can grow its way back to a 2% capital ratio. Some are concerned that FHA is underestimating its losses and may need a government bailout in a few years.

    A University of Pennsylvania professor of real estate finance recently released a paper entitled “Is FHA the Next Housing Bailout?” Wharton School professor Joseph Gyourko points out that negative equity and job loss are the “two most important triggers” for defaults.“It is estimated that more than half “ of FHA-insured loans are underwater, he says, and unemployment rates are projected to remain “stubbornly high.”

    Gyourko contends that losses due to future defaults are being systematically “underestimated” and FHA may need a $50 billion capital infusion “even if housing markets do not deteriorate unexpectedly.”The FHA commissioner told reporters that she is “mindful and aware” of the downside risks facing the federal mortgage insurance fund. “It would take very significant declines in home prices in 2012 to create a situation in which the current portfolio would require any kind of additional support,” she said.

    The actuaries have already factored in a 5.6% decline in housing for 2011 with prices bottoming out and rising 1.2% in 2012 in determining FHA’s capital ratio. If FHA needed a capital infusion, it can seek financial assistance from the Treasury Department. FHA would not be dependent on Congress for a bailout. Galante also pointed out that FHA has paid out $37 billion in claims over the past three years and increased its loan loss reserves by $20 billion. In addition, HUD expects revenue from the FY 2010 and 2011 FHA loans will pay for “their own future claims and contribute substantially toward paying losses on earlier books of business.”

  30. I took this straight from my complaint. I did not cite case law for the rescission but relied totally on TILA and Reg. Z. I am not an attorney and could find no help with my case, but if anyone find use from it…great!

    110. Defendants have not provided Plaintiffs request of the debt validation pursuant to USC Title 15 Section 1692(g). Plaintiffs requested in writing and by certified mail, validation of the debt on five (5) separate dates, the latest in response to Defendants letter through its counsel dated May 5, 2011. Defendant’s actions in demanding payment of an unverified and challenged debt and for which Defendants have offered no proof that they have legal standing and capacity to make this demand pursuant to Civil Rule 17(a)(1). Refusing to validate the debt violates FDCPA referenced above and is subject to penalty up to $1,000 per violation. Plaintiffs also state that Delaware Courts recognize an implied covenant in contracts requiring the parties to act with good faith toward the other party with respect to their contract. Katz v. Oak Indus. Inc., 508 A.2d 843, 880 (Del Ch.1986). A party must “act reasonably to fulfill the intent of the parties to the agreement.” Restatement (second) of Contracts § 205 (1981). Defendants violated the implied covenant of good faith and fair dealings from the date of the refinance loan application date of January 25, 2010 and continues to violate it to the present date and have caused significant harm and damage to Plaintiffs financially, destruction of their credit and emotional harm in defense of actions on the part of the Defendants.
    111. The total “Finance Charges” computed in the refinance loan of February 23, 2010 were understated and is sufficiently understated to exceed the $35.00 tolerance pursuant to Regulation Z 226.23(h)(2)(i) Special rules for foreclosures; tolerance for disclosures.
    112. The failure to accurately disclose the “Finance Charge” fees allocated in the transaction from origination to present is a failure to provide a material disclosure as that term is defined under 15 U.S.C. § 1602(u) and § 1611(2); Regulation Z §226.23 (a)(3) n.48.
    113. On or about March 29, 2011, via letter from the law firm of _______ on behalf of their client, BAC Home Loans Servicing, LP, (BAC) denied Plaintiffs request on February 18, 2011, to rescind the refinanced loan dated February 23, 2010. Plaintiffs rescission request was timely requested per statute of limitations. The letter from _______ had an enclosure of the “Right to Cancel” disclosure signed by the Plaintiffs, therefore, based on Defendant’s proof of signature, Plaintiffs could not request a rescission. Plaintiffs do not deny signing the notice of “Right to Cancel”, however, in the rush and lateness of the closing and the rush of the closing agent to gather his equipment and paperwork, the Plaintiffs were not left with the executed copies, therefore, Plaintiffs were denied receipt their right to cancel. Further, even by Bank of America’s own admission, they reference “two” signed copies of the “Notice”. A closer review of the Regulation clearly states that “each” borrower is to receive two (2) complete and executed copies of the “Right to Cancel”. Therefore, Plaintiffs should have received four (4) complete and executed copies. Under 15 U.S.C. 1625(b), if a lender disputes the right to rescind, they have twenty (20) days to file a legal action for Declaratory Relief. Defendants did not file for relief, therefore by operation of law, the security interest and promissory note automatically becomes void and the consumer is relieved of any obligation to pay any finance or other charges (15 USC 1635(b); Reg. Z226.15(d)(1)..See Official Staff Commentary § 226.23 (d)(2)-1; (Section 226.23 of Reg. Z implements § 1635(b)). The TILA statute is clear that a Court has the equitable (emphasis added) discretion to alter who “tenders” first, but it does not have the discretion to enforce the voided security interest as it is an operation of the law.
    114. Plaintiffs make the final TILA argument here regarding disclosures. “Under TILA, if a loan is secured by a debtors’ primary residence, “the obligor shall have the right to rescind the transaction until midnight of the third business day following the consummation of the transaction or delivery of the information and rescission forms…whichever is later.” 15 U.S.C. 1635(a). Thus the delivery of the forms is not enough. The transaction must have been consummated and the information delivered. The withholding the real name of the lending source, refusal to provide it later under the guise of confidentiality or other excuse, keeps the transaction in a state of limbo because the full transaction has either not been completed (see single transaction theory which would incorporate all of the insurance, credit default swaps, collateralization and third party transactions which completed the entire transaction) or has not been disclosed through the delivery of information about the transaction (not telling the borrower that his signature and identity were being “launched” from the closing table into the hands of unknown investors putting up much more money then disclosed to borrowers and more then the amount needed to fund the loan transaction) with huge fees and profits generated by all of the intermediaries (undisclosed to the borrower) with the added condition that if the borrower or one of the insurers (also undisclosed) did not pay, the Federal Government would step in and pay 100 cents on the dollar to satisfy all counter party risks. Two (2) conditions apply here:
    1) The addition of conditions and parties, co-obligators and insurers changed the instrument (note) from a negotiable instrument to a non-negotiable instrument meaning the original obligation was paid in full and a new obligation was then created under UCC Article 3.
    2) Since the information about all the undisclosed parties to the mortgage contract agreement and the fees and profits that were not disclosed, all material disclosures was never delivered to the borrower, the transaction is either not completely consummated or rescindable under the three-day right of rescission. Arguments to the contrary under the great weight of all opinions of the courts would be contrary to the rule of construing consumer remedial legislation liberally in favor of the consumer (borrower).
    115. Plaintiffs have been damaged in the following ways:

  31. Can someone please post a (simply), explained step by step process for a pro se to do this rescission thing?


  32. Can a letter of recission be sent re fraud ADOT (from successor servicer-only – not a lender or beneficiary and who cannot sell or transfer anything to trust closed years ago) that now clouds title because it sheds doubt on who has owned and held the mortgage since origination? Also sheds doubt on where the payments have been going and to who? Thought TILA statute of limitations was up after three years but Neil says “SO THE ONE YEAR STATUTE, THE THREE DAY STATUTE, AND THE THREE YEAR STATUTE ARE NO BAR TO RESCISSION IF YOU STILL DON’T KNOW WHO THE IDENTITY OF THE REAL CREDITOR AT THE TIME OF CLOSING” Does a letter of receission apply in this instance?

    Also isn’t there something in the TILA that a new “lender” has to notify in writing with name address and phone within 30 days?

  33. Pretty happy to see attention given, including social a’s comments, to what is really a powerful tool for homeowners. So before we are off and running on other issues, anyone have links to good tila rescission cases to post here? If nothing else, existing tila cases will or at least should point to the applicable statutes involved and give those contemplating rescission
    good arguments and those to avoid.

  34. Federal Reserve of Washington, Daniel Tarullo is the most prominent legal literate member of FED that is close to DC. And he is FOR Fed to purchase mBS….



    And he is a huge enabler for TBTFs…

  35. Some change will come ,the next Court Day for CHASE-HELOC
    Class action is on the 12/21/2011 .

  36. I sent rescission letters to two banks. One sent a letter back stating the loan could not be rescinded because it was a purchase money loan. The other did not respond, though I sent it via Fed Ex, and it was signed for, they kept saying it was never received. That one was a refinance.

    Also, I am suspicious now. I called the IRS because the servicers would not send me copies of the 1099s. IRS said they would mail me the copies and they have not. The IRS said that one of the banks had sent them a 1099-C stating that the debt had been dismissed. That is the home we were evicted from and Wachovia foreclosed on the 2nd mortgage. I had also sent W a banker’s acceptance and never heard back. I wonder if they cashed it and booted us out, anyway. They kept denying they had received that, too.

  37. I filed a Chap. 7 and then an adversary complaint, pro se, as I could not, and to present, have not found a willing attorney to help. I have hung on fighting BoA for 10 months now and have a trial date scheduled in late 2012. I found this blog interesting because this is, in part, the route I have taken. My story to date is very long and would be far to much to post here, however, I asked for a rescission in Jan. 2011 and received a letter from one of their many attorneys they have fighting me, denying my right to rescind. They sent this letter in March 2011. We, signed, but never received copies of the right to cancel as well as many other violations. I am not a lawyer, have no legal training, but my understanding would lead me to believe the law is very clear with the process that must occur after notice to rescind. They must file for declaratory relief within 20 days from the request. Most of the money paid by the borrowers must be returned, which I won’t detail here as there are some exclusions, and tender must then be made. We stopped paying after that as we ran out of savings and our incomes went down and could no longer afford the full payment and all our debts. The law states that once we gave them notice to rescind, we were no longer obligated to make the payments, at least the interest portion. We have kept up the property taxes, insurance and HOA fees. It seems that the law is specific that a judge can’t interprate the act of rescission, but he/she may rule on the amount and process of tendering. I won’t know if my understanding and my application of use has any merit until the judge hears it, but I will let you know how it plays out. I have also alleged unjust enrichment as they yanked us around for over a year applying over and over for a modification then when we were almost out of savings suddenly decided we qualified for a refinance which earned BoA a substantially larger profit while tacking on thousands more to our already underwater loan balance. After reading all the research I could on unjust enrichment, it seems that the famous BoA bait and switch clearly contains the legal elements needed for the charge. What worries me is I have not seen or heard much about the use of unjust enrichment as a charge against the lenders.

  38. I always said we should use the FDCPA….

  39. Now let’s talk about the ***PENALTY*** for NOT RESPONDING to the rescission, because rarely does anyone talk about this IMPORTANT PIECE.

    This is what happens 98% of the time (and did with OUR rescission MORE THAN TWO YEARS AGO!). The lender will “deny your rescission” via a curt letter. THIS IS A NON-RESPONSE and not allowed under the law. They have NO AUTHORITY over whether or not you can rescind!!! ONLY THE COURT DOES. We are STILL in litigation over the fact that they CANNOT FORECLOSE WHEN THE NOTE IS VOID UPON RESCISSION. ***THEY HAVE NO STANDING.***

    There is copious case law which states that when the lender does not respond timely to the rescission (within 20 days) they will FORFEIT any right to tender. This is logical, as otherwise THERE WOULD BE NO INCENTIVE TO RESPOND TO THE RESCISSION within 20 days! For a lender to ignore a rescission, put a borrower through the HORROR of years of litigation and all of the expense, arriving at the final decision of the court that the rescission WAS VALID, and then cry that they are entitled to TENDER just as though they did everything right… is plainly UNCONSCIONABLE and rewards them for their vile behavior.

    When the lender fails to respond to the rescission, it does not change the fact that the note is IMMEDIATELY VOIDED UPON RESCISSION. They are now trying to collect an UNSECURED DEBT (usually in a foreclosure action) and therefore are NOW SUBJECT TO WRONGFUL DEBT COLLECTION PENALTIES PER THE FDCPA.


    We’ll keep you posted… but our rescission was carefully and perfectly executed, and there is NOTHING that they can do to say otherwise. Their opportunity to contest the rescission was within the 20 days following it via declaratory action. That window of opportunity has closed, and they no longer retain any rights as a “LENDER”.

    Now they will face severe damages and fines for what they have (and are) putting us through. Every phone call, every statement, every debt collection, public advertising of debt owed, threatening to take our house they do not have a note for, and other false claims, all are illegal per FDCPA. It’s time to END this terrorism. THANK GOD the courts are FINALLY starting to see behind the curtain of greed.


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