TILA RESCISSION: The war is NOT over contrary to bank disinformation

The banks have not asked for an order vacating a TILA RESCISSION because they know that following standard procedure would block  them from challenging TILA RESCISSION.

This is PROCEDURE vs SUBSTANCE. That is what this has always been about. As more courts continue to “rule” on TILA RESCISSION, getting it wrong every time, the effort to discredit TILA RESCISSION is picking up steam.

Here is the bottom line: I never said that the borrower would always prevail if challenged. I only said that the borrower must be challenged if a creditor wants to avoid the consequences of rescission. And failing to do that means that the rescission stands, by operation of law. I have also said that only a party with standing can bring that challenge and that on its face such a party does not seem to be the same as the party seeking to enforce the paper.

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In the past couple of weeks I have received hate mail from those who are pretending  to be on the side of homeowners whilst adamantly opposing TILA Rescission. The banks are more scared of TILA RESCISSION than anything else. So their effort is directed at discrediting the express wording of the statute, the Supreme Court decision directly on point and of course anyone (e.g., me) who persists in pushing the use of TILA RESCISSION. I will say openly that the courts have managed to tie up rescission now just as they did before SCOTUS stopped them. And once again, SCOTUS will administer a stern warning about playing with the express wording a clearly worded statute.

Remember when the general rule was that rescission was a claim and not an event — i.e., that homeowners had to bring an action to enforce rescission in order for rescission to be effective? That’s gone now.

So now they are saying that the likelihood of the defeat of the homeowner in a hypothetical lawsuit directed at vacating the TILA RESCISSION means that the rescission should be ignored (but not subject to a final judgment in which the TILA Rescission is vacated. That will be gone soon too.

Judges are not empowered to render decisions based upon a hypothetical lawsuit. The lawsuit to vacate the rescission must be real and must be filed by a party with standing. And standing cannot be based upon the note and mortgage which are void by operation of law. Standing in such a suit can ONLY be established by a party to whom the underlying debt is owed.

These purveyors of “bad news” will continue to report each erroneous court decision (as I predicted) until once again, the US Supreme Court smacks down the bad decisions for (a) not following the statute, (b) not following the SCOTUS Jesinoski decision and (c) not following standard due process procedure. Such a decision is extremely likely considering the unanimous Jesinoski decision.

And I would ask them — “If you are so sure that TILA Rescission is a dead horse, why are YOU spending any time rebutting TILA RESCISSION?”

Once again these paid shills for the banks are intentionally confusing procedure with substance. I never said that the borrower would always prevail if TILA RESCISSION was properly challenged. I only said that the borrower’s rescission must be challenged if a creditor wants to avoid the consequences of rescission. And failing to do that means that the rescission stands, by operation of law. I have also said that only a party with standing can seek relief from a court including bringing that challenge. I have also said that on its face such a “creditor” party does not seem to be the party seeking to enforce the paper and oddly enough, might not exist at all.

The error that occurred in the remanded Jesinoski case was the assumption or presumption that the party claiming to be beneficiary under the deed of trust was an actual creditor instead of a possessor or holder of the note. As per the express wording of the TILA RESCISSION statute, such a party relying upon paper documents are relying upon a note and mortgage that are void by operation of law and thus could never be the basis of legal standing to challenge TILA RESCISSION.

The court and the parties continued with a basic erroneous assumption:  that somehow a party who claims only to be holder of a note or mortgage can somehow challenge the notice of TILA RESCISSION. By failing to challenge their opposition on the question of standing (because the note and mortgage were void) the Jesinoskis sealed their own doom. This in turn enables the sometimes nonexistent claimant for a nonexistent claim to twist legal procedure and simply attack the notice of rescission with a motion and/or affidavit instead of a complaint in which it alleges standing to sue based upon the underlying debt.

The remand of the Jesinoski case to the trial court should have resulted in a stay of the proceedings for a defined period allowing the “creditor” to affirmatively allege that it has standing because it is the party who would suffer financial injury and that all disclosures were made, —thus requesting from the court that the rescission be vacated — something that has yet to be done anywhere — despite direct advice and counsel from lawyers for the banks. The problem they face is that the banks were given 20 days to challenge rescission— just as the homeowners being given up to 3 years to invoke rescission.

Despite the FACT that a TILA RESCISSION is effective upon mailing or delivery by operation of law, the courts simply refuse to treat it that way. As a result, no order has been entered nor has it been requested by the banks — a court order in which the rescission was vacated. The banks have not asked because they know that following procedure would block  them from challenging TILA RESCISSION.

You can’t blame them. Steamrolling seems to work for the banks. It’s better than law!

But a decision from the US Supreme Court along the lines expressed in this article is likely to materially effect many of not most foreclosures where the notice of rescission was delivered prior to the foreclosure sale or the foreclosure judgment.

PRACTICE HINT: If you are dealing with a party claiming rights to foreclose on the basis of being “holder”, that is probably an admission that they are not a creditor. Hence they would not have legal standing to demand relief from a court when seeking to vacate the rescission. If they had purchased the underlying debt, in all probability, they would assert themselves as having the status of a “holder in due course” (and of course prove it). This needs to be fleshed out in discovery — and by demanding discovery on the issue of standing you are highlighting the fact that the rescission is effective and that a challenge to rescission must be a pleading of a case of action — in other words, where they are forced to allege their basis for asserting legal standing.

12 Responses

  1. why you’re commenting on this issue without having read either the statute or the decision is one of the great mysteries of the cosmos.

  2. Sorry Bob…Off topic?…NOT. The TILA rescission would not even be necessary if it was not for the fraud on the court and all of U.S. The Jesinoski decision is an attempt to remedy something that would not have been an issue other than for the fraud. Do you think? It does boil down to a lega/law issue… However when the laws that are written/interpreted favor the fraudsters, then we have to resort to “Jesinoski”. How is it that this fraud is even open to interpretation? It has been going on now for over a decade, that I know of, and yet it is still going on. Ready for the next round? It is coming. AND… I will read the statute and SCOTUS decision and Neils take on it. Thanks for the suggestion.

  3. sunman, i have absolutely no idea what you are talking about. the topic is the tila rescission statute and the jesinoski case. period. we’re not talking about civil or criminal fraud. read the statute and read the scotus decision. see if you can reconcile the statute and the decision with NG’s legal arguments. i can’t. but perhaps you are a better commercial litigator than i am. have at it.

  4. Bob G
    So there is a time limit on FRAUD? 3 years, you say. So if what you say is true, then the banks just have to put you off for 3 years and a day, and then there was no CRIME? B.S.

  5. yo mama…yes there is. jesinoski said only that the mortgagor did not have to file suit to rescind, just give notice of intent to rescind. also, the jesinoskis served their notice within the 3 year statutory period. the statute in various sections refers to the necessity of comply with section f, the time period in which such a rescission can be noticed. and the statue says that the judge has some discretion in how the parties proceed. my guess is that scotus would have never taken this case if the jesinoskis had missed the 3 year notice date.

    also, neil is hung up on the issue of loan “consummation.” i don’t get that, either. something must have been consummated otherwise the homeowners wouldn’t be filing notices of rescission. money did change hands, for sure. and if the homeowners are not really notifying the real creditor, but rather a trustee only posing as a creditor, then they would not be filing an effective notice.

    and this was an 8-0 decision. it couldn’t possibly be an 8-0 decision unless this was strictly a black letter law issue, i.e., how the notice is effected, subject to the 3 year statute of repose.

  6. There’s nothing wrong with the analysis! If you don’t get it read it again. Then if you still don’t get it read the Supreme Court ruling. If that still doesn’t make you understand it, walk away.

  7. @ Bob – Congratulations. You are being intellectually honest. The reason you don’t get it is there is something wrong with the analysis

  8. i still don’t get it.

  9. On 2/20/18 I mailed a notice of rescission to Chase, the services, they wrote me back that they cannot honor my request to rescind the loan. It has bee more than 20 days since the TILA was sent.
    Bank already lost on 10/29/15 for lack of standing. Original lender is bankrupt and all statutes of Limitaions have sailed for the bank.
    Is it time to ask the Court for protection?

  10. The truth will prevail….I hope I live long enough to see it.
    And WHAT will this new decision for those of U.S. already defrauded? Is there time limit on fraud? I know my home of 32 years is gone.. I just want justice.

  11. We filed a writ of certiorari with Scotus a month ago.

  12. We need another TILA rescission decision from SCOTUS. The big question is: who is the creditor?

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