Business has been transformed from the sale of goods and services to procuring the private information and signatures of consumers to generate revenue far above “price” of the target product or service that the consumer believed they were purchasing.
In the case of foreclosures or mortgage transactions, there is a complete absence of disclosure. In most other transactions, especially those online, the disclosure is hidden within the box labeled “I agree.”
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Consumers cannot invest time, money, and expense in reading and analyzing the transaction documents presented to them. This was recognized as early as the 1960s when the Federal Truth in Lending Act (TILA) was passed, and various state laws mandated compliance with disclosure and fair dealing with consumers. TILA and its progeny established the good faith estimate, and disclosure requirements were established (although they have been ignored more and more over the years).
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Accordingly, these commercial actors’ procurement of consumer “consent” is neither informed nor real. If consumers were directly informed of a good faith estimate in the amount of revenue to be generated by their transaction in the form of sales of data, information, and documents, they would then have the ability to bargain for a better deal, insisting on higher incentive payments or discounts.
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Such disclosures are precisely what is legally required under TILA. But they are never given to the consumer. And the enforcement mechanism of TILA Rescission has been effectively rescinded. Despite hundreds of thousands of rescission notices properly sent and received within the three-year period required, all of those cases proceeded to foreclose on a canceled note and mortgage.
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Even the unanimous 2015 Supreme Court decision in Jesinoski was insufficient. TILA is simply not enforced properly by any agency or any allowed legal process despite adequate express requirements that the courts follow it.
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In the case of installment contracts, consumers should be entitled to much higher incentive payments — i.e., by agreeing that this is not a loan transaction but can be treated as such. In such cases, consumers agree that any person appointed by an identified central controller (investment bank) could make claims and present evidence of default without any registered loss or financial injury.
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More specifically and directly addressing the main goal of TILA, consumers would agree to deal with entities with no interest in the transaction’s outcome except to foreclose when they wanted to do so.
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The basic contractual balance has been lost with no stake (risk of loss) on the part of the commercial actors. Consumers might be able to agree to that, thus waiving the legal requirements and agreeing to a virtual law that does not exist. But it should come at a price.
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And that is why I think that legally all homeowners subject to false claims of securitization (sale of their “debt”) should be entitled to damages based not only on the harm from a wrongful foreclosure but on their commercial right to receive an equitable share of the total transaction that was hidden from them.
Filed under: foreclosure |
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