Jesinoski Revisited. Rescission is in the details.

It continues to be true that the statute is clear, the rules of procedure are clear, and the rules of evidence are clear — yet trial courts are adamantly opposed to allowing homeowners to use the power granted to them by Congress.

The second ultimate decision by the trial court that Jesinoski had to tender the money to Countrywide before the rescission could be effective is just as wrong as the same court’s prior decision that  the rescission would not be effective — a decision that was unanimously overturned by SCOTUS.  It put a condition on the effectiveness of rescission when SCOTUS clearly stated, and the statute clearly stated, that there were no conditions for the effectiveness of rescission other than the required notice.

Virtually everyone is ignoring the elephant in the living room, to wit: Countrywide was not a lender or even an aggregator. It was a conduit for an aggregator and far removed from the actual transfer of funds attendant to the apparent loan.

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The ultimate decision in the Jesinoski case was against the rescission. This was wrong and in flagrant disregard of the Jesinoski decision rendered by the SCOTUS. The decision simply stated that the rescission WAS effective the moment it was dropped in the mail (or delivered.) You can read the attack on me in Bob Hurt’s blog in the above link.

Rescission was effective starting with the mailing and uncontested delivery of the notice of rescission, if someone wants to challenge it they must do so in a lawsuit to vacate the effective instrument. This is the most basic procedural law — you don’t get relief without asking for it and the way you ask for it is by filing an pleading in court and getting a decision vacating the rescission notice. This trial court never vacated the rescission probably because it knew it had no power to do so.

You can’t get relief unless you first establish legal standing. SCOTUS said that the rescission was effective in this case and all others like it. It is uncontested that rescission caused the note and mortgage to immediately become void – not conditionally but actually.

So in order to bring a claim you would need to file a claim stating that you are being injured by a wrongfully delivered notice of rescission. That is called standing. The only party who could do that is the owner of the debt, since the ownership of the note and mortgage (void instruments now) is irrelevant. And THAT is where the trial court got it wrong (again). In the absence of a pleading from the owner of the debt, the trial court was devoid of jurisdiction to render any decision in which there rescission was ignored.


Hurt, a non lawyer, is apparently attempting to discredit a Federal law. But he is voicing the party line of the banks. The trial court was twice in error when it entered judgment against Jesinoski and if Jesinoski had the resources to appeal again they MIGHT well have won. It does appear that the “issue” in the trial court was whether the rescission stands. Clearly the opposition did not follow the requirements of statute.
BUT it is possible for the appellate courts to see this as harmless error since the factual finding of the trial court was that proper disclosure was given to Jesinoski. While that finding is also appealable, appellate courts are not likely to intervene in a  finding of fact unless there was absolutely nothing in the court record to justify that finding.
So in the end this is about evidence and the failure to present it.
Since rescission is all about proper disclosure and since Jesinoski failed to show that required disclosure was not given at the “closing” of the loan, it may be assumed that they would have lost in an action brought by Countrywide or its successor to vacate the rescission. But that is an advisory decision prohibited to any court.
The assumption is improper. That is why we have rules of procedure. If you want relief you must plead for it not simply argue about it. Countrywide never filed a pleading to vacate the rescission, as far as I know. And the rescission was never vacated even by this decision.
The trial court decided instead to accept the challenge from a party without standing (CW did not own the debt and their standing was entirely based upon the void note and mortgage). Inherent in the trial court’s erroneous decision was the presumption that was used to allow Countrywide to oppose the rescission — i.e., that because it supposedly had the original note and mortgage, it therefore owned the debt. The rest is history.

This decision assumes that Countrywide had standing apart from the note and mortgage, i.e., ownership of the debt. And it also assumes that there was an action filed by Countrywide to vacate the rescission. Neither of these was addressed, much less the 20 day requirement for filing such an action. Instead the trial court simply continued its error by ignoring the rescission because of its factual finding that disclosures had been properly given. But the disclosures were given by people who withheld basic information that is required under the statute, to wit: the identity the lender and the identity of the creditor (i..e., owner of the debt).

So this case went down because Jesinoski did not stick with the requirements of burden of proof, and the requirement that a party with standing make the challenge to the rescission within 20 days. Ignoring the 20 day limitation period results in placing a condition to the effectiveness of there rescission in contradiction to the express wording of Federal Statute and SCOTUS. There are no conditions. Jesinoski failed to press the rules of evidence, based upon the written opinion, which could have landed a victory.

Virtually everyone is ignoring the elephant in the living room, to wit: Countrywide was not a lender or even an aggregator. It was a conduit for an aggregator and far removed from the actual transfer of funds attendant to the apparent loan.

This is why I am offering a seminar on evidence on February 2, 2018. The devil is in the details. And too many foreclosure defense lawyers do not properly prepare to attack the details. The trial court decision is basically a political decision, not a legal one. So it continues to be true that the statute is clear, the rules of procedure are clear, and the rules of evidence are clear — yet trial courts are adamantly opposed to allowing homeowners to use the power granted to them by Congress.


Register now for Neil Garfield’s Mastering Discovery and Evidence in Foreclosure Defense webinar.

22 Responses

  1. I think I’ve been too harsh on Storm. After all, as far as I can tell, we only disagree about TILA rescission. I can understand why someone would have a different view on it than I would. But, just because I think he’s wrong about TILA rescission doesn’t mean he doesn’t know how to help borrowers in other ways.

    And, although a reading of the court’s granting of defendant’s 12(b)(6) motion on Storm’s TILA rescission claim makes it sound like he’s making the same argument Neil makes, a reading of the court’s decision on his motion to reconsider gives more detail on Storm’s TILA rescission claim and it is clear that Storm contended his rescission notice triggered a duty on the lender to void the security interest. Since Neil thinks the security interest is voided by operation of law upon a borrower’s rescission notice delivery, I was wrong about concluding Storm made the same argument as him.

    Also, although Storm lost on TILA rescission, he ultimately beat his lender’s summary judgment motion concerning a claim that he was damaged by an unreasonable concealment of the owner of the obligation. Storm also successfully argued equitable tolling of TILA time limitations on the same basis. Finally, judgment was entered in favor of Storm, which included an award of attorney’s fees and costs.

    Anyone who can win like that can’t be all bad.

  2. Hi David. I didn’t say his Storm’s case was identical to Jesinoski’s – no case is identical to another – I said he used the same argument.

    Both Storm and Jesinoski:

    1. Mailed a rescission notice within three years, but did not sue within three years;

    2. Faced a lender that insisted it had to agree to rescission or that a lawsuit pleading rescission had to be filed within 3 years;

    3. Countered the lenders argument that all that was needed to effect rescission was a rescission notice mailed to the lender; and,

    4. The sole issue that each of their TILA rescissions hung on was whether a rescission notice sent within three years was sufficient to effect rescission of the loan, or whether they had to also file suit within three years to avoid expiration of their TILA right of rescission.

    Now Storm is giving Neil Garfield and anyone else a hard time about using the same argument he did – after Jesinoski proved him right about it?

    Storm argued his case contending his notice was sufficient to rescind the loan and now he dismisses every part of the SCOTUS Jesinoski opinion except for one sentence?

    There’s just no reasonable explanation for it. Any other explanation certainly doesn’t add up to his supposed concern for borrower’s rights.

    You can think what you want about him, but after seeing what actually went down in his own TILA rescission and how now that Jesinoski vindicated the argument he lost on, he is railing against it. It just doesn’t pass the smell test and more than suggests an improper purpose to his bombastic outbursts.

    And get this, he even stated that he WON the TILA rescission! That’s right, with the help of the Consumer Financial Protection Bureau he was able to get his loan rescinded. And it was a refinance loan, by the way – which he will tell everyone is not subject to TILA rescission.

    Then, he makes other borrowers out to be deadbeats, when he just got lucky (or became a stealth hire by the banks) and hasn’t made a loan payment in 10 years – as the Brits say – what a cheek!

    I know I won’t be doing business with Storm due to the foregoing.

  3. I have had my go-around with “Storm” but I actually think he usually makes a lot of sense when he’s criticizing psuedolegal theories. I don’t personally know what he does, as I can’t figure it out from his descriptions. But what some call his “blowhardiness” about nonsense theories is usually him just bluntly telling the truth to people who are more in the mood for positive sounding but unworkable fairy tales.

    I don’t know what his exact take on Jesinoski and TILA rescission is, but I personally believe it to be a pipe dream for 99% of the litigants. And I’m not so sure his case was “identical” to Jesinoski.

  4. FYI, R, Bob Hurt was working with some outfit to offer some form of “help” to homeowners for money like chain of title or securitization audits. He has been gone for a long time, and I hope it stays that way. Nasty troll.

  5. I actually think Bob Hurt has a lot to offer.

    However, his major problem is his worship of that blowhard, “Storm Bradford,” “Rock,” “Amicusman,” or whatever he’s calling himself these days. That’s who has sold Bob the koolaid with regard to TILA rescission.

    The funny thing is, Storm is now contending that the law of TILA rescission is really what the US District Court stated in denying him TILA rescission, which has now been disapproved by SCOTUS.

    That’s right, pre-Jesinoski, Storm contended that his notice of rescission effected the rescission when it was mailed (within the three years) and the court found it didn’t because he also had to file a lawsuit within three years.

    Sound familiar?

    In other words, Storm lost on the same argument Jesinoski won with at SCOTUS and, in so losing, Storm’s lender used the same failed argument SCOTUS trashed in Jesinoski!

    Now the question is why is he doing it?


    Or, maybe the bank let him stay in his house if he agreed to use his considerable talents at being a bombastic fool to hopefully entice enough borrowers to follow his lead so they could get crushed in court. A kind of psy-op to discredit borrower lawsuits in general.

    Hmmm. Yup, that’s the only thing that makes sense to me at this point – I mean the guy is trashing the same argument he once made that has now been made the law of the land by SCOTUS! Lol.

  6. @ Ks – preach it brother! I tell people this all the time!

  7. Let’s ponder Rescission. It mean legally taking back something. In TILA language, the correct interpretation of rescission may be to say “the contract was “cancelled” by operation of law.

    In California, we just saw a TRO go down in flames over a very uneducated ruling from an unsophisticated judge who 1/ failed to read the TRO motion then opined inanely 2/ there was no urgency [immediate harm caused to a litigant]. Ethically, not reading briefs arguably is a violation of the Canon of Ethics for all judges. Secondly, the man was facing 2 battles…one a valid rescission performed in 2008 by his attorney and now, an eviction battle in a second court case based on a failure of the second court to recognize the “void” nature of the Note from 10 years past.

    Those who criticize the judiciary to these issues, are absolutely correct. If a judge willfully fails to follow the law its not just an appellate issue but an ethical one. Nationwide, a plethora of complaints are mounting against judges with various states Judicial Performance commissions and organizations. A complaint against a judge can cost the judge tens of thousands of dollars out of his personal wealth to hire counsel to protect his job/office/robe. But the ethical grounds must be stated with precision when you complain. Read the Ethic’s rules aka “canons” governing judges in your state and file the complaint if the conduct is egregious. It can be done at state and at the federal level and the procedures are well stated in the various web pages.

    Does anyone get this point? If so, then follow through and “just do it.”

  8. @ Cementboots ,,

    Sure ,, it’s the well known AIG v Bank of America case 10549 central district california where BofA paid out $650MM in restitution,, pertaining to the ins. payout on my trust ,, it was the culmination of prior suits ,, in particular the hilarious one where AHMSI was sued by LPS because they released the underwriting docs… AIG wasn’t looking to invalidate the loans ,,, BUT the court determined that the underwriting and funding was 100% Bank of America and that the named lender , Option One had NOTHING to do with the loans or the poor quality of the loans (82% didn’t meet underwriting criteria and 7% didn’t make even the first scheduled payment!!) which is why the TRUE LENDER ,, Bank of America had to pay… This only applies to “Option One Mortgage Loan Trust 2007-FXD2” … I have all the publicly available info on all the notes in the “trust” including the exact amounts , exact dates , origin city/zip code… everything but the names of the borrowers … and every one of them ,, 800+ people are potential litigants in a class action that would BURY OCWEN…

  9. Latest OCWEN NEWS ,, Erbey dumps/unloads shares

  10. Doesn’t matter what you say about recission; In CA the courts don’t care, tried everything but if it was beyond the three year they automatically throw it out even when the bank did not answer. THere is no winning on recission claims in CA if you are beyond the three or even 4 year in CA, been there, done that, got the T. Shirt to prove it. THE COURTS SIDE WITH THE BANKS EVERY TOUCH AND TURN NO MATTER HOW HARD YOU FIGHT. I WOULD LOVE FOR YOU TO PROVE ME WRONG BUT I AM NOT SEEING IT STILL FIGHTING BUT NOT GETTING PAST THE COURT CORRUPTION. Show me a winning CA case on this after the 3 years

  11. @ Charles Cox, that is an interesting point. Has that been taken up on appeal anywhere?

  12. Consummation vs Closing

    Seems like various state laws redefine “consummation” as not the actual consummation (the initial fulfillment of promises made by both parties to a contract – think marriage) but instead, make it apply to the moment that a written obligation of a debtor (the wife) is signed at a “closing” in a loan transaction… These definitions do not take into account the duty of the originator or alleged lender (the husband) to timely perform their duties, especially to provide a record of the funding in the debtor’s name toward the discharge of the contracted obligation. This occurs most often in “refinance” deals where there is no seller or buyer, simply a rearranging of computer entries between financial institutions. This leaves the alleged debtor (the wife) wanting for proof of fidelity, consideration and performance while operating under the presumed legal disability created by the state’s definition. As you can imagine, and we have seen, this can have a deleterious effect on a judge’s or debtor’s ability to calculate the actual deadline to timely file a TILA rescission notice within the three year statute of repose.

    This is unconscionable and must be challenged at every turn.

    cement boots

    Consummation vs Closing (First United)

  13. see also
    BENEFICIAL ILLINOIS, INC. v. Parker, 68 NE 3d 493 – Ill: Appellate Court, 1st Dist., 1st Div. 2016,14&as_ylo=2014

    ¶ 27 Based on the foregoing, we affirm the part of the decision of the circuit court that found Randall’s counterclaim for wrongful disclosures to be time-barred, but we reverse the decision of the circuit court with respect to Randall’s rescission affirmative defense and counterclaim based on Beneficial’s failure to timely respond to the rescission letter. We therefore remand this case for further proceedings.

    ¶ 28 Affirmed in part, reversed and remanded in part.

  14. @neidermeyer

    you said” I have the answers documented as findings of fact in a federal suit… and the answers say one thing clearly… NO STANDING , entire case is FRAUD.”

    any chance you can share that case and your documentation with us here?

  15. I think Hurt is part right and part wrong. He is wrong in his opinion on TILA rescission. He is correct that we must also attack the presumptions in the original paperwork… but that is something that Neil also points out and will cover in his next seminar – I think.

  16. Good words to use as part of the argument for any rescission.

    Sent from my iPhone


  17. @ Hammertime & C Cox ,,

    Exactly … that’s why I am so enjoying OCWEN twist in the wind refusing to answer any disco… I have the answers documented as findings of fact in a federal suit… and the answers say one thing clearly… NO STANDING , entire case is FRAUD. in fact the note is void as it is documented that lender is NOT as stated on note… as backup I have a TILA rescission sent to the TRUE lender… and their reply which conflicts with the federal case findings… a fine mess…

  18. Agree Charles from the homeowners perspective never knew proper parties invalid contract. Is property party a disclosure? Hurt is a parrot for the bankster script.

  19. Yes, the courts are wrong about Rescission and so is Bob Hurt. I thought we were never to hear from him again.

  20. Moreover, the ONLY “creditor” designated by 15 USC 1602(g) was the original “Lender” or (creditor) named in the originating, contractual documents…NO ONE ELSE! It has nothing to do with ownership of the debt but statutorily, was defined in the instrument(s) themselves.

  21. Yeah, Hurt is a moron, always has been.

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