Rescission After Judgment

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We have been obliged to drill down to what happens post judgment for the banks. Can you rescind. I have arrived at two diametrically different conclusions depending upon whether the state conducts foreclosures judicially or non judicially, but you should check with a qualified attorney who knows your facts before you make any decision based upon the content in this article.

Simply stated, in a nonjudicial state, you can still send the rescission post judgment because the judgment is not a foreclosure judgment and the loan contract obviously exists — otherwise there would be no right to sell the home non judicially.

In a judicial state it gets more complicated — and the likelihood of having any judge agree that the rescission had any effect narrows considerably.

There is a question of when you could send a rescission and have a real chance at getting traction in court. While we started from the premise that any rescission sent at any time is effective until it is declared ineffective by a court order, it became apparent during the review process on some loans and afterwards, that there was a specific procedural issue that several lawyers with whom I consulted, stated was a real problem.

That issue was that judgment had already been entered. While we could attempt to use the rescission as a procedural tool and while it is possible to attack anyone seeking to avoid the rescission on the issue of standing, we were unable to develop a theory or fact pattern in which it would not be apparent on its face that the loan contract, if it ever existed, no longer existed. And THAT meant that the rescission would NOT be effective when mailed because there was no loan contract to rescind. That is based upon the conclusions that after judgment is rendered, the rights and obligations of the parties arise from from the Judgment, not the loan contract, note or even the mortgage. [Comments and analysis on this are welcome. Send them to].


There are some divergent opinions on this issue but I have ultimately decided that I agreed with the attorneys who took the position that the loan contract was legally over when judgment was entered and the time for rehearing and appeal had run. My decision is based upon a very technical gray area of Florida law. Different states have different laws.


I have voiced the opinion that it can be sent (there is nothing stopping you, even now) and recorded as an exhibit to a Notice of Interest in Real Property, and that it would be effective, as a matter of law when mailed. I still think that is the case.

The question, though, was whether the rescission would actually have an effect if there was no loan contract. For a while now I have believed that the loan contract existed, at least in part, for the duration between entry of judgment and sale of the property. But I have now narrowed my opinion to be that while the judgment is in the period of time for rehearing or appeal, there might indeed be a way to argue that the loan contract still existed and that it could therefore be canceled. After researching the matter further I concluded that based upon Florida statutes and case decisions, most courts would conclude that a letter announcing rescission long after Judgment was irrelevant — because there was no longer anything to rescind. And the rescission could not vacate the judgment entered by the court.


But none of this means that you couldn’t attack the foreclosure as a wrongful foreclosure based upon fraud as to the owner of the debt, the owner of the note and the owner of the mortgage. And that in turn frequently leads to settlement, including retention of the house. It is in this area that the right to actually cancel the loan contract might still technically exist, although I doubt any Judges will take the bait.


Sometimes professionals must protect their customers from themselves. I recently concluded, for the sake of a prospective client, that the odds were stacked against them on all fronts and that while possible, there was nothing “probable” about winning anything. Having come to that decision I could not in good faith take any more money from them for the purposes of attacking the banks. Other attorneys might differ.


My job is tell you you what I think, not necessarily to tell you what you want to hear. In the end, after consideration and reconsideration I have decided that in a judicial state where the time for rehearing and the time for appeal has already run, such a case does not did not present a high likelihood of success on the issue of rescission.


I still see actions for wrongful foreclosure being very ripe for litigation for foreclosures based upon fraudulent documents and representations to the court. Attacks on Judgments are tough but attacks on the banks for abusing the judicial process are opening up and getting easier. Any action taken post judgment in a judicial state is still an uphill battle. But the case law is changing in favor of homeowners seeking damages as opposed to defending foreclosures.

14 Responses

  1. Dear Neil
    If the note was forged and you have absolutely conclusive proof. Then the note is void period, there is no time limit whatsoever. If the notary signature and seal is fake and you have real proof then the note and mortgage is void even after a foreclosure judgment. Banks will claim that the recision fails because a final judgment has been merged. But that only applies when and or if the note was consummated. In a forged note or fake notary there can be NO consummation under the merger doctrine because forgery has no time limits. When Banks have no consummation. Note is void and nothing can change that for any reason. Also, A Recision notice issue in bankruptcy puts the banks claim of a secured note into a second unsecured position at best. But the note is still Void. I and many other would appreciate your opinion on the above.

  2. The act of rescission, which was properly in effect after -The lender failed to respond within the 20 days, separates the deed of Trust from the Promissory note rendering the Bank without “standing to foreclose”, and the foreclosing court without subject-matter jurisdiction because in order to have subject-matter jurisdiction the promissory note must be collateralize by the deed of trust which is effectively nullified by the act of rescission.
    Any order of sale issued from the foreclosure court is void for lack of subject-matter jurisdiction.
    Neither Res judicata or collateral estoppel applies when the court is without subject-matter jurisdiction.
    The “modern rule . . . gives finality to even void orders if the issue of subject matter jurisdiction has been litigated and decided in the proceedings leading to the questioned judgment.” Restatement (Second) of Judgments. (See also People in Interest of E.E.A. v. J.M., 854 P.2d 1346 (Colo. App. 1992).
    Normally the lender purchases the property which should be vacated because the lender is not a holder in due course if a trust is involved then neither the trustee or the Trust were not holders in due course because they both knew of the infirmities in the transaction due to the rescission, either actual or imputed under the Close Relationship Doctrine where there “…is such a significant ongoing interconnected business relationship” between the Trust and US bank as the trustee, that trustee’s conduct is imputable to the Trust. Stotler v. Geibank Indus. Bank, 827 P.2d 608, 611 (Colo. App. 1992)
    Further, the court has held that, if the judgment sought to be vacated is void because the court lacked subject matter jurisdiction, any time limit established by C.R.C.P. 60(b) is inapplicable. Mathews v. Urban, 645 P.2d 290 (Colo. App. 1982)
    In Deutsche Bank Trust Company Americas v. Samora, 2013 COA 81 the court said:
    ¶ 47 Because the warranty deed is not void, in order for Samora to defeat Deutsche Bank’s claim to quiet title in the Trust, she must show that Deutsche Bank as trustee is not advancing a claim by the Trust as a holder in due course of the Note and Deed of Trust.

    As in Samora, to defeat the Trustee’s claim, the plaintiff must show that the Trustee is not advancing a claim for the Trust as a holder in due course of the Note and Deed of Trust. The argument of holder in due course goes to the Trust’s right to foreclose ,and is consistent with the reasoning in Samora. The lack of the court’s subject-matter jurisdiction due to the rescission, also goes to the right of the court to foreclose.

  3. Reblogged this on California Freelance Paralegal and commented:
    Interesting blog post by Neil Garfield on sending a notice of rescission under TILA after a judgment has been entered. I agree with him that in a non-judicial foreclosure state you might be able to succeed. Of course that all depends on the judge that you get.

  4. The BURNING QUESTION as to a “modification” is:

    Why did CONGRESS exempt the back-end, long-term INTERLOPER SERVICER from RESPA-&/or-TILA-related notice(s) & disclosure(s) requirements in the event of a downstream “modification”?

    After all, compliance was required by the front-end, here-&-gone SECURITIZATION CONDUIT ORIGINATOR who never intended to, and did not, FINANCE with any of its own monies in any aspect of the original transaction; and was involved in that transaction for about as long as “a cup of coffee.”

    It is an irrefutable fact that neither the front-end SECURITIZATION CONDUIT ORIGINATOR nor the back-end INTERLOPER SERVICER have any “skin in the game,” e.g., neither ever lent any of its own monies in performance & CONSUMMATION of the “loan” transaction as represented (table funding), therefore suffered no RISK of harm or injury; and despite the LINO representation in the INSTRUMENTS, neither are a “lender” providing any TRUTH as to the purported financing transaction.

    Why no TRUTH IN LENDING, if any purported financing in effect, including a “modification”?

  5. Neidermeir- modifications are new contracts………are they, legally speaking? I’ve been told by a number of know-nothing attorneys that modifications are just that, modifications of the original mortgage. I feel differently about it, but have never been able to find any well-reasoned case law wherein a modification is determined to be a new contract, or a new mortgage. Do you have anything on this? Thanks.

  6. Standing on the Sidelines

    Many Blessings to All !

  7. I’m Impressed !!!
    “You can’t stop a Foreclosure but you can Delay it for Years!”

    Legally Speaking

    The 1st time I Heard that Statement …I was Confused!!!!
    But Now I See!

    UC UCC 3 Capacity?

    Its Like Beating Yourself Up!

  8. @TU

    Discounting the modifications, as those are new contracts…
    My HAMP which looks to be rather “cookie cutter” has language about reverting to the original terms and such in event of a default… so I would say the original exists… the “new” “modification” is just that ,, a modified original. no money changes hands, no new liabilities , no new parties…. if I “modified” my car by putting a bigger engine in it ,, and then “reverted” to the original engine a year later the car is once again “original” and it has always had the same VIN number.

    I am going to use that “reversion” language that nullifies the HAMP mod to absolutely GUT OCWEN when the time comes and the clock is ticking.

  9. Does your company have a sample of a rescission case?

    Thank you.

    On Mon, Feb 29, 2016 at 7:47 AM, Livingliess Weblog wrote:

    > Neil Garfield posted: “WE HAVE REVAMPED OUR SERVICE OFFERINGS TO MEET THE > REQUESTS OF LAWYERS AND HOMEOWNERS. This is not an offer for legal > representation. In order to make it easier to serve you and get better > results please take a moment to fill out our FREE registration for” >

  10. Good at confusing what is the absolute.
    If there is no loan contract there should have been no standing, no case, no suit, no judgment, no fraud theft of property.
    I will repeat forever; the foreclosure can only occur with the creditor.
    When it is not the creditor, it is not called foreclosure.
    Always mixing the absolute.
    I have the law dictionary, and know how you twist words that we use out here.

    Discounting the modifications, as those are new contracts, and although no money changed hands from them to you, they may be able show they paid 35 cents or some token amount to whoever they took the purported loan from, and thus they took it in good faith and can show they paid some consideration to who ever sold them the rights to the papers and the computer screen info of the account.

    Not talking about modifications, those who have one, created their own new problems trying to avoid the old problem.

    My comment, is for the people who are still under their original agreements that had no full disclosure where they could easily fall into that mortgage settlement because their original, by definition only, lenders dissolved, went bankrupt, disappeared, etc, and papers got reassigned in MERs or through some other trickery and paper shuffling deception to another, by definition, servicer.

    The comment is:

    If someone wants to rescind, it can be in their ‘answer’ to the suit, and also if they’d use the CFPB when these thieves start their lawsuit action they’d find the Matrix has unlocked doors they will not see until they go to use them.

    Going to that court, business, is like ‘p'[ing]’ in the wind that is blowing it back in your direction and hoping to not get any on you.

    Use the tools given to you.
    Many will let a leader, [lawyer], tell them what they can and cannot do, and that’s their fault to not use their power, but to let someone else grant it or tell them they can’t use it, now.

    These lawyers for these banks will write they believe you owe them so they believe they have a right to sue you for what they think you owe them.

    Then they write blogs that you should not use a tool because what you would use it for may not exist, even though the tool is specific to its use, if the ‘thing’ doesn’t exist, the tool makes no change, if the thing exists, the tool does what it is meant to do.

    They, lawyer/liers, claim to think the non existent exists, and then tell you to not act as if the non existent exists to protect your rights.

    If they would act like a loan exists, you send a rescission and act like it exists too! How hard is that.

    If the loan doesn’t exist, they have no standing, and if the rescission is for a non existent loan, then that will come to light and they have no standing.

    How hard is that.

    You make sure they see the rescission in the answer to their fake lawsuit that will give them your real property. You make sure, it’s part of the court record in your answer, you get a certified copy of that answer from that court, and take a photo copy of it with your cell phone, and attach your cell phone to your computer, and file a complaint with the CFPB giving every name that signed a document to sue you for your real property, you name them all, and attach that rescission and tell the CFPB your complaint.

    This is not for the modification people, you have created a new contract, and you never identified what you are modifying, whether it’s a ‘new lender’, and whether they loaned you money, or bought your account off someone who pretended to loan you money. I have no input on modifications as I did not agree to do one with strangers to the original transaction.

    Trespass Unwanted, Creator, Corporeal, Life, Free, People, Independent, State, In Jure Proprio, Jure Divino

  11. In other words, prudence dictates that everyone should mail the notice of rescission pursuant to TILA, regardless of the time, as there was no TRUTH disclosed or represented in the SECURITIZATION CONDUIT TRANSACTION that the LINO assymetrically knew and intended from the inception of the nullified putative contract.

  12. Neil, after a judgment has been entered against the borrower. I would argue that the loan still exists. I say this because the borrower is usually given a grace period after the judgment is granted and still has until the sheriff sale to bring the loan current and stop the sale and void the judgment.

    The only way the borrower could do this is if the loan still exists.

  13. On a factual pattern supporting the assertion that the SECURITIZATION CONDUIT ORIGINATOR (“LINO” = Lender In Name Only) disguised the transaction as as a loan contract while knowingly concealing the table-funding by an undisclosed third party channel (for example, a warehouse lender, or the ostensible purchasers of the REMIC’s bonds) for the self-serving purpose of a hidden financial gain in a securitization transaction (a fraud at the inception), there is simply no valid CONSUMMATION of a loan transaction by the real parties because the MAKER of the NOTE & DEED OF TRUST (the LEGAL INSTRUMENTS), in the capacity as a BAILOR, was not loaned any monies by the LINO — as was the intent of the BAILOR in the transaction; but obviously not the intent of the BAILEE/LINO.

    In fact, as BAILEE of the LEGAL INSTRUMENTS the LINO suffered no RISK as a “lender” whatsoever in the PRE-PLANNED SECURITIZATION CONDUIT TRANSACTION which was BROKERED through any number of SECURITIZATION CHANNELS piped to a REMIC or Re-REMIC entity where the LEGAL INSTRUMENTS purport to, or where required to, have been TRANSFERRED (a PROMISSORY NOTE is not assigned) in order to maintain the integrity of the chain-of-title as a matter of law.

    Even if the LINO “retained servicing” of the SECURITIZATION CONDUIT TRANSACTION, where there is an eventual separate SUCCESSOR assignment of a DEED OF TRUST to an INTERLOPER SERVICER (or whomever), it is in fact another BIFURCATION of the DEED OF TRUST from the NOTE purportedly held by the undisclosed REMIC or Re-REMIC entity.

    Because the LINO had already intentionally TRANSFERRED the NOTE to a putative REMIC entity, yet “retained servicing” under the disguise of LINO on the DEED OF TRUST, other than “servicing” on behalf of a REMIC entity, the LINO had no legal “interest” in the DEED OF TRUST to “assign” to another INTERLOPER SERVICER, as the “assigned” DEED OF TRUST was no longer a security for anything whatsoever — a NULLITY as a matter of law.

    There can be no CONSUMMATION of a contract fraudulent at its inception, to wit:

    37 Am Jur 2d at section 8 states, in part: “Fraud vitiates every transaction and all contracts. Indeed, the principle is often stated, in broad and sweeping language, that fraud destroys the validity of everything into which it enters, and that it vitiates the most solemn contracts, documents, and even judgments.”

    NO CONSUMMATION: REMEDY of RESCISSION of contract, either by TILA or common law.

  14. Finally, fraudulent documents are starting to be looked at and, possibly, litigation instituted.

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