TILA Rescission: My Current Analysis

Posted on November 2, 2017 by Neil Garfield

The strong antipathy that judges have for TILA Rescission has caused them to directly flout the provisions of a Federal statute and the the direct instruction from their boss — the Supreme Court of the Untied States (SCOTUS).

But there are several strategies than can be employed that will make it difficult for banks to use their wrongful foreclosures to their advantage and maybe even prevent them from getting the forced sale of the property in the first place.

REMEMBER: TILA Rescission is an EVENT. It is not a claim requiring adjudication in the courts.

The rescission is ALWAYS effective upon mailing and subject to being vacated or set aside by a court of competent jurisdiction upon the filing of timely claims by a party with legal standing — not the same parties who were using the note and mortgage unless they were also the actual creditor.

You can compare rescission to foreclosure. When the sale is complete and the deed is issued the event has happened. It is no longer a claim. Even if the sale can be voided because of a void assignment or whatever, the sale still has happened. It’s history and it is in the chain of title.

When rescission is dropped in the mail it is history. ANY decision that implies or states that rescission was not effective because of this or that is wrong. The rescission is always effective upon mailing even if it was wrongly sent. And the only person who can sue to vacate the rescission is a party with legal standing. Since the rescission IS effective the note and mortgage are void. That means they can’t use the note and mortgage to establish standing. THAT is jurisdictional!!

Until a final order or judgment vacating the rescission is entered by a court of competent jurisdiction the TILA rescission remains effective.

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THIS ARTICLE IS NOT A LEGAL OPINION UPON WHICH YOU CAN RELY IN ANY INDIVIDUAL CASE. HIRE A LAWYER.
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Based upon the express wording of the statute 15 U.S.C. 1635, and the ruling from SCOTUS that the statute’s wording is clear and thus permits no interpretation, and the ruling of SCOTUS that the statute is procedural, and simple logic, I believe that SCOTUS will eventually rule that every rescission notice is effective even if it invokes a right that has expired. The whole purpose of the statute is to allow the homeowner to wipe out the deal without going to a lawyer much less filing a lawsuit. Rescission is NOT a claim. It is an event. That much is clear from the SCOTUS decision in Jesinoski.
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If ANY question is allowed to be raised about the viability of the rescission notice then it follows that the rescission notice is NOT effective on the date of mailing — until a court decides whether it should have been sent in the first place.  This result is 180 degrees opposite to the wording of the statute’s express wording and 100 degrees opposite to the ruling of SCOTUS who says that the wording of the statute means that the rescission IS effective upon mailing.
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Faced with a rescission notice, banks have only two choices. Comply with the three duties or file a lawsuit to vacate the rescission or for a judgment that says they don’t need to comply. But the banks are not the injured party and thus lack legal standing. And they can’t use a robo-plaintiff or robo-beneficiary to press the case because that would mean that the rescinded loan closing documents were being used for the purpose of establishing legal standing.
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If there was a legitimate loan closing and legitimate purchases and sales of the note and mortgage (deed of trust), there would be no problem for the current creditor to allege standing based upon the fact that they are or would be the injured party and then state the grounds upon which the rescission should be vacated. But the banks don’t have a legitimate loan closing. In many cases, they don’t have a loan closing at all. (No money loaned by originator nor by anyone in privity with originator). And they don’t have any actual purchases or sales of the note and mortgage (deed of trust) — at least none that matches their documents.
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Hence in virtually no case is there legal standing to contest the rescission, which is effective upon mailing.
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If you record the rescission notice then it becomes part of the chain of title — a potential problem for the banks. If they sue to clear title you can attack them on standing. You don’t actually need to file any lawsuit at all. The banks know they can’t meet the standards for legal standing so they are not filing any lawsuits to remove the rescission notice from the chain of title. Instead, they are issuing title insurance that covers the rescission and people are taking it. Their successful strategy thus far is to bluff judges into a ruling that either ignores the rescission or directly conflicts with the rescission even though there rescission is effective by operation of law starting with the date it was mailed.

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Since in most cases there was no consummation of a loan contract at the time of the “loan closing” the legal issue becomes whether you can adopt a strategy of saying that the loan contract was consummated at a later time — i.e., within 3 years. If that is the case all they can do is defend and then again become subject to attack on standing and without the ability of the banks to use the “loan documents” they will never be able to show an injured party.  That strategy must be based on some sort of good faith statement of ultimate fact, even if weakly supported. You need enough to survive demurrer or motion to dismiss.

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The author of the rescission notice MAY file a lawsuit seeking to enjoin the Defendants from using or filing documents relating to the rescinded note or rescinded mortgage (deed of trust). If you make it through a motion to dismiss or demurrer, the dark side will be forced to conjure or fabricate a party who has “legal standing” even to defend your lawsuit. The only valid defense would be that you sued the wrong parties. Anything else challenging the effectiveness of the rescission requires legal standing and should be struck from the defenses unless they allege that this party is going to suffer financial injury directly arising out of the rescission — an allegation that would open their books of record in an unprecedented manner.

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In the absence of saying that consummation was less than 3 years ago, the statute’s provision stating that the right to rescind expires three years after rescission will be applied by nearly all judges. So they will presume that consummation was on the date of the closing documents and apply the three-year rule. That presumption is dangerous because it presumes that a loan occurred between the originator and the homeowner. In most cases, it didn’t.

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If you never had a consummation, rescission does not apply —  no consummation means no loan contract and no loan contract means there is nothing to rescind. But if you prevail on no consummation then you can apply for the cancelation of the deed of trust.

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If the notice of rescission did occur within 3 years of the date set on the closing documents then the statute clearly applies — but judges are ignoring it or finding ways to allow violation of the statute and the SCOTUS decision. The Courts were slapped down by SCOTUS once (in Jesinoski) when the court stated directly that it was error to consider rescission a claim. It is an event, for which no lawsuit is required  It looks to me like they need another slap from SCOTUS.

Filed under: foreclosure |

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36 Responses

  1. Leo Blas, on November 13, 2017 at 8:51 pm said:

    Can you bring a State wrongful foreclosure case into federal bankruptcy case?

  2. Never quit, on November 12, 2017 at 9:17 am said:

    Check, 17-672 is the scotus docket for the next best Tila Rescission case since Jesinoski.

  3. Never quit, on November 10, 2017 at 1:33 pm said:

    Keiran vs homecapital has made the scotus docket as 17-762.

  4. Marjorie Partch, on November 8, 2017 at 10:29 pm said:

    I’m asking again that my real name not be used, and that I be listed as ‘Pro Se in Conn.”

    Thank you.

    ________________________________

  5. Leo Blas, on November 8, 2017 at 9:59 pm said:

    Thanks, I also recorded TILA Rescission, and we just got the IPA requiring the party’s to meet in 45 days. This is the third go around, i could file for a CH 13 stay, but I’m not sure if this is a good idea.

    Thanks again,

    Leo

  6. Jan van Eck, on November 8, 2017 at 5:09 pm said:

    To leo Blas: it is not “illegal” if your enemies make it stick. YOu are on the right track to sue them, making your claims, and asking for injunctive relief. By putting the sisues into play, my guess is that the so-called “sale” goes nowhere, at least for now.

  7. Jan van Eck, on November 8, 2017 at 4:54 pm said:

    assuming that is your 2013 case with Citimortgage, then you are in a difficult court in Stamford, as you are before either Judge Tierney or Joudce Provodator, and both have this long-standing antipathy against pro-se homeowners, no matter how solid their case. There are some arguments that can be brought forth, depending on who is sitting on the adverse side. You have both Hunt, Leibert and Locke Lord in there, both play dirty routinely, and think nothing of flat-out lying to the Connecticut courts. Your status conference Hearing for the 13th does mean you have to do some prep work. Unfortunately your docket cannot be accessed from outside as it is older, thus not in electronic form for persons with no appearance in the docket. I can see a number of issues, go ahead and e-mail me at janvaneck.conn@gmail.com and see if there is a viable sgtrategy at this point. In any event I would not be raising Rescissioin before either of these judges, they are hostile to the concept and simply make their own law as they go along. A very difficult environment. Cheers.

  8. Marjorie Partch, on November 8, 2017 at 12:23 pm said:

    Thank you for all your great work and info! I am a post-three-year-rescinder, on the basis of lack of consummation – back in 2005. The loan appears to have been furnished by an undisclosed table-funder at the time (turned out to be Flagstar [yuck] in a bad bait-and-switch); the de facto “broker” of the deal was the supposed (named) lender, who never provided any funds, and yet it was they who supposedly indorsed the Note (to the table-funder, in 2005) and assigned the (separated) (Fannie Mae) Mortgage (through MERS of course) a full SEVEN YEARS LATER. So this was Fraud in the Inducement, was it not? I rescinded a few months ago, and they did nothing until I filed on Land Records and with State Trial Court where foreclosure was pending (until I appealed a Denial of my Motion to Open for Fraud a few weeks later). THEN they filed w Fed Court to get a Declaratory Judgment that the rescission was invalid, because untimely. I say, No Consummation, No Deadline. I know a lot of folks say, No Consummation, No Rescission – but this is where I started. Then they filed for a Motion for Injunction in the State Trial Court – which I believe has lost its jurisdiction to the Appellate Court and / or the Federal District Court. This has been scheduled for a hearing. I am drafting a Memorandum in Opposition, and considering a Motion to Dismiss in the State Trial Court for Mootness and Lack of Subject Matter Jurisdiction, given the rescission. Is this a mistake? Is it an invitation to the State Court to adjudicate the Rescission? I have read and absorbed your point that it is a past event, even if untimely; and not a claim. Their best remedy for them would be a new Action to Vacate on their part, where they have to establish Standing in terms of Owning the Debt, not merely possessing the (fraudulent and now-canceled Note)? Do I want to hold off on Motion to Dismiss in Trial Court? That is also my plan in Federal Court, bc there are too many “issues of material fact” for a Declaratory Judgment – or a Summary Judgment, for which they have also moved. I am also pointing out the three simultaneous jurisdictions. Thank you again, and Urgent! – Pro Se in Conn.

  9. Leo Blas, on November 6, 2017 at 3:26 pm said:

    Thank you very much, this is an illegal non judicial foreclosure by an illegally appointed trustee and by a servicer that is not a beneficiary . I filed for illegal foreclosure and TRO in Alaska State superior court.

    Thanks

  10. Jan van Eck, on November 6, 2017 at 3:06 pm said:

    to Leo Blas: Without knowing what State you are in and also not knowing the mindset of the State-court judges you are contending with, it is hard to say. In general, my suggestion would be to file a quiet-title action (if possible, in the US District Courts) and ask ONLY for quiet title, using the rescission as a foil to any claim by that party. You do NOT ask for money damages in the quiet title action as the demand for money damages would open the door to all the other parties barging in into your case on the pretense that they are protecting their interests against money damages, even though they have no claim on the property that could be supported.

    If all you are suing for is the title to your lands, then others, i.e. servicers, ex-note-holders, all the clowns and pretenders, cannot appear to defend as they have no interest to defend. It winnows out all the pretenders and leaves only the real owner of the debt – who is likely not to show up, as his claim was paid by some third-party surety long ago (i.e. AIG, Ambac, Radian Guaranty, the insurers of credit defaults).

    You can file your money damages lawsuit later to collect from the pond scum.

    Be sure to get your suit filed and your request for Injunction before the Court before your Dec 04 trial date, as once you have a Judgment against you then you are dealing with the intricacies of the “Rooker-Feldman Doctrine,” which most Federal Judges do not fully understand but love to recite as an excuse to do nothing in your matter.

    You should also know that Bank of America is particular always shredded the original Notes on intake into their system. We have a recording of a Vice President of BofA emphatically stating that “We shred those.” (after taking the electronic image). EWverything that BofA produces in Court is a “re-creation,” or in layman’s terms, a forgery, a reprint off a scan. ANd who knows how the digital scan was manipulated in between.

  11. Leo Blas, on November 6, 2017 at 1:26 pm said:

    I sent TILA Rescission letter certified on October 2, delivery received October 6, I have wrongful foreclosure case against Bofa, and sale date of December 4, should I file separate action for TILA relief or a motion?

    Thanks,

    Leo Blas

  12. Jan van Eck, on November 5, 2017 at 5:52 pm said:

    Responding to “Kalifornia” and others here, I would caution against attempting to use “lawyerspeak” in Pleadings. Kalifornia addressed what was termed as the “Maker’s Execution” of a note/mortgage. Those are terms of art that foreclosure-mill attorneys just love, as “execution” has a distinct legal meaning and includes acts that are otherwise not alleged and remain unproven allegations.

    Specifically, “execution” includes the acts of “signing” and of “delivery.” When you admit Execution you admit the specific legal acts of signing the disputed instrument and then of delivering the disputed Instrument to the Obligee (usually claimed to be the Lender). This is a trap.

    In a typical loan-closing, the new homeowner is led into some room, is presented with a thick stack of papers with little yellow arrows on them stating “sign here,” is told to sign them, has no clue what they are, and the papers are gathered up by some other person (usually unknown) and whisked away, never to be seen again. And that is emphatically not “execution,” as YOU did not deliver anything to anybody. All you did was sit there. “somebody else” is doing “delivery.”

    So, do not attempt to sound all Learned and throw around words such as “Executed,” because you are simply trapping yourself.

    The other thing to remember is not to describe various pieces of paper which have legal-sounding words in the Title as anything other than “a piece of paper.” If the paper says “NOTE” on the top, is it really a Note or is it legal garbage? Nobody knows, as the piece of paper is not examined and it may well not fit the legal parameters of a Note (Most do not). Judges are the worst offenders in this as these so-called “Notes” do not contain and restrict themselves to the essentials of a promissory note, and many reference necessary acts or events contained in other papers, thus defeating the “four corners of the Instrument” rule.

    So, do NOT call it a “Note” unless you know it is one! And since most are not, just reference it as ” Defendant admits that he signed a sheaf of papers presented to him at closing but denies that any of them is a Note,” or: “Defendant admits he signed a piece of paper that would appear to have the word “NOTE” written across the top, but denies that such piece of paper is a Note.” Don’t trap yourself in a blind alley.

  13. CementBoots, on November 5, 2017 at 5:48 pm said:

    The Keiran case also serves to remind us not to open up a “judicial can of worms” on the merits of your rescission – only sue for a declaratory judgment that you did in fact – based on evidence of your mailing by US Certified mail – actually issued the rescission notice.

    Jesinoski and the TILA statute itself takes care of the rest –

    If the REAL holder of the purported debt did not appear and sue you within 20 days to overturn your notice – (according to Neil and others) – GAME OVER… no longer can they enforce the note and mortgage documents…

    Keep It Simple

    ‘boots

  14. CementBoots, on November 5, 2017 at 5:22 pm said:

    Hey Never Quit – Thanks for the heads-up on the issue. However, please be kind to your fellow bloggers and cite important cases like this with links so others can do research – just headlines here are not enough – just sayin’… OK?

    Everyone, here is the link to the (obviously) flawed thinking of the Appellate court who ruled that a lawsuit MUST be filed and a court MUST rule on the question in order to effectuate a TILA rescission… (Scalia is rolling in his grave)…

    http://media.ca8.uscourts.gov/opndir/17/06/153437P.pdf

    The only concern I have is that SCOTUS may not grant certiorari because the question has already been decided in Jesinoski… They don’t like to “chew their cabbage” twice.

    Any thoughts?
    ‘boots

  15. Never quit, on November 3, 2017 at 5:48 pm said:

    Fresh off the press, a new petition for writ of certiori has just been filed before scouts. The case “Keiran vs Homecapital” 15-3437 out of the eighth circuit. This case challenges the rebuttable presumption ,the statutory rescission sequence(20 days) as well as the numerical formula used in regulation z to establish Rescission tolerances. As you are already aware, the 8th circuit has a terrible track record of creating new law when it comes to tila rescission , and this case was originally attached to Jesinoski before scouts in 2014. The Keiran’s have been litigating their rescission claim since 2010

  16. CementBoots, on November 3, 2017 at 4:00 pm said:

    here is the case Marshall & Paatalo discussed:
    BENEFICIAL ILLINOIS, INC. v. Parker, 68 NE 3d 493 – Ill Appellate Court, 1st Dist., 1st Div. 2016

    https://scholar.google.com/scholar_case?case=17619152669116104969&q=%22beneficial+illinois%22+v+parker+&hl=en&as_sdt=4,14

  17. CementBoots, on November 3, 2017 at 3:31 pm said:

    After listening to the radio show… where Bill Paatalo cautioning against arguing trying to rescind a loan that you feel was never consummated… also remember that not only can you rescind the mortgage and note, you can rescind your consent and signature from the closing documents – so rescind the whole thing!

  19. Kalifornia, on November 2, 2017 at 10:39 pm said:

    CORRECTION:

    …thus, in the context [of a MAKER’s EVENT of rescission under] TILA GENUINE ISSUE(s) OF MATERIAL FACT EXIST…

  20. Kalifornia, on November 2, 2017 at 10:34 pm said:

    @ “‘boots”

    […raising a craft DOUBLE IPA to you and yours for state-specific links to PERSUASIVE authority for ANY OTHER COURT’s consideration!]

    The clear purpose of the links to Illinois authority is so that anywhere a record can be made with persuasive support of the EVENT of a TILA rescission having occurred.

    @ ALL

    Despite the EVENT of a MAKER’s EXECUTION of the MAKER’s NOTE & DEED OF TRUST/MORTGAGE, there are triable issues as to whomever is purporting to ACT as having STANDING & AUTHORITY to foreclose — thus, in the context a TILA GENUINE ISSUE(s) OF MATERIAL FACT EXIST for a fact finder to hear and decide AS TO CONSUMMATION, RESCISSION, and subsequent DAMAGES for WRONGFUL FORECLOSURE.

    Let a jury hear and decide — not a purported judge.

    MAKE A RECORD!

  21. CementBoots, on November 2, 2017 at 6:51 pm said:

    If you download and study the links below – you can get a handle on what you need to do regarding TILA rescission… these are Illinois Supreme Court and Appellate Court rulings… Finally Illinois courts are joining with New York, California and Florida Courts in a clear and concise adaptation of Jesinoski… While this may not be controlling law in your jurisdiction outside Illinois, it is certainly “persuasive” in your case… best of luck!
    ‘boots

  26. CementBoots, on November 2, 2017 at 5:44 pm said:

    However – the right to receive TILA disclosures goes long and deep to parties not previously thought to have that right… It goes to any party whose rights of ownership or residence (homestead) might be affected by a foreclosure – including a corporate Land Trust Trustee!

    see: Financial Freedom Acquisition LLC v. Standard Bank & Trust Co., 2015 IL 117950

    http://www.beermannlaw.com/if-you-own-your-home-in-a-land-trust-you-may-be-able-to-rescind-or-renegotiate-your-mortgage/

  27. CementBoots, on November 2, 2017 at 5:34 pm said:

    MB

    Yes Jesinoski ultimately lost back at the trial court after reverse and remand by SCOTUS because in their initial pleadings by their attorney, they admitted that they signed a document acknowledging that received the requisite notices. This of course is a rebuttable presumption which they waived by not challenging the truth of said acknowledgment early on. The court ruled that if no violation of TILA disclosure regs occurred, they had no subject matter or reason to rescind. Whether or not that really fits into the SCOTUS opinion remains open for debate. It is not clear if Jesinoski will attempt to appeal that ruling too. I think their lawyers are exhausted and have given up.

  28. MB on the bubble, on November 2, 2017 at 5:22 pm said:

    @Jesinoski proponents and opponents:

    If memory serves me correctly Jesinoski ultimately lost because they lost the argument as to whether they had received the correct number of Notice{s} of Right to Cancel. This argument is a critical angle of attack for the banksters and one would be well advised to adopt Neil’s Deny and Discover strategy should you be pressed to respond to that inevitable question.

  29. CementBoots, on November 2, 2017 at 4:45 pm said:

    Just keep reading and re-reading Jesinoski – the words never change…

    https://www.supremecourt.gov/opinions/14pdf/13-684_ba7d.pdf

    The only question is if/when a consummation ever occurred – remember what consummation means?

    “the point at which something is complete or finalized.”

    The signing of closing table papers is not a “completion” of the duties expressed therein… it is where the terms of the deal are expressed…

    If for example, the borrower is intending to refinance his purchase loan – essential to completion would be the new finance company proving (by causing a recording a discharge of mortgage of the original loan) that it actually paid off that previous loan in full…

    If that event does not occur or occurs 4 years later, then the first sign that the borrower is given that the deal is consummated is established by that late discharge of mortgage recording…

    Until then, the borrower is quite literally still under obligations to the original as well as the new deal…

    think about it…

  30. Kate Smith, on November 2, 2017 at 2:52 pm said:

    Just a thought. If you sue someone in court and they do not fight so the judge issues a ruling in your favor effective upon expiration of the time limit to file an appeal. After the time to appeal expires you try to collect and the other party sues to say the original ruling was illegal because it was not based on correct evidence. The judge could throw that out for res judicata, it was already adjudicated, correct? Why is trying to fight the rescission during a foreclosure not also considered res judicata? It was effective at the time of mailing just as the judgement was effective at the time of ruling, and once the time to appeal or fight was expired it became final?

  31. Kate Smith, on November 2, 2017 at 2:37 pm said:

    Just a thought. If you sue someone in court and they do not fight so the judge issues a ruling in your favor effective upon expiration of the time limit to file an appeal. After the time to appeal expires you try to collect and the other party sues to say the original ruling was illegal because it was not based on correct evidence. The judge could throw that out for res judicata, it was already adjudicated, correct? Why is trying to fight the recission during a foreclose also considered
    res judicata? It was effective at the time of mailing just as the judgement was effective at the time of ruling, and once the time to appeal or fight was expired it became final?

  32. Helen, on November 2, 2017 at 2:26 pm said:

    Thank you Mr. Garfield, your rescission information is very useful. I wish I had known your work in 2013 when we first confirmed that our ‘Wamu 2004’ vintage mortgage was fraudulent and should be rescinded.
    I believed the TILA expiration disqualified that option and so pursued lack of standing, which Chase still has not proven.

    I now plan to revisit the option rather than sell ( we are not underwater) to avoid foreclosure. Thank you.

  33. Dr. David, on November 2, 2017 at 1:22 pm said:

    Hey Neil ! If you are serious about taking a case to the supreme court I have one for you.

  34. Leo Blas, on November 2, 2017 at 12:30 pm said:

    Thanks

  35. louise, on November 2, 2017 at 12:08 pm said:

    Leo, I tried to file TILA Rescission letter at the Register of Deeds office, but they would not accept. I was told to try again by attaching the rescission letter to another more-accepted document with the Reg. of Deeds office.

  36. Leo Blas, on November 2, 2017 at 11:56 am said:

    I filed TILA rescission letter a month ago and there is no response, should I record it, I actually sent it certified with return receipt and got the return receipt. I Already have a foreclosure case going to stop yhe foreclosure sale date December 4.

    Thanks,

    Leo Blas
    907-350-5369

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