Removing Liens Rendered Void by TILA Rescission 15 USC §1635

Client goes into the office of an attorney and tells him/her that a notice of rescission was sent. The attorney without studying the issue says the rescission never happened. And so it goes.

In my opinion once the time limits have expired on claims arising from TILA (which includes the debt) the county recorder should remove the encumbrance from the chain of title or be ordered to do so by a court of competent jurisdiction.

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The attorney might be on the right track but for the wrong reason. There literally is no question about the meaning of the TILA Rescission statute 15 USC §1635 because the highest court in the land said there is no question. And without any question there is no room for interpretation. See Jesinoski. 
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The plain wording of the statute says that once the notice is sent the OLD loan agreement is replaced with a NEW statutory mandatory loan agreement. This is the factor that is missed by most lawyers and judges on trial and appellate courts. The wording of the statute is clear and it is effective by operation of law the moment the notice is dropped in US postal Service mail.
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It’s not a declaration that the deal is completely gone. It is a change in terms required by statute. Banks have ignored it at their peril but so far successfully.
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The courts have strained themselves in their rebellion against this statute because they don’t think so much power should have been vested in each borrower by the legislature. So the judges answer to the problem is to pretend that the legislative branch did not say what it said. SCOTUS thought it was putting an end to that nonsense in Jesinoski but most judges continue to ignore the mandate of both Congress and the Supreme Court.
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 So there we are. In simple terms the average person who has sent a notice of rescission has title to property that by operation of law has no encumbrance thereon.  But the OLD encumbrance from the OLD loan agreement is still in the County records. I think the recording of the notice of rescission is sufficient to bring an action in mandamus against the county recorder’s office to remove the encumbrance from the chain of title, but I can offer no guarantee that a court will order that, even though it is legally and morally correct.
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In order to do that properly I think it would be prudent to first send a demand letter to the county recorder asking that the encumbrance be removed and asking for whatever instructions they would give in accomplishing the removal. 

5 Responses

  1. These were not traditional mortgages. These were securities transactions with no disclosure to the homeowners.

  2. Reblogged this on Deadly Clear and commented:
    “The plain wording of the statute says that once the notice is sent the OLD loan agreement is replaced with a NEW statutory mandatory loan agreement. This is the factor that is missed by most lawyers and judges on trial and appellate courts.“

  3. There is NO Loan. Argue Nothing else. Simple !!

  4. There is NO Loan. Argue nothing else. Simple !!!

  5. I agree with this, but the court is another matter.

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