Livinglies's Weblog

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TILA rescission is about the regulation of predatory practices in lending or transactions presented as loans when they are driven by other business reasons without notice to the homeowner and in contravention of state and federal laws.

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Because of illegal and other predatory practices by banks and other lenders, Congress was presented with two choices. They could establish a massive new Federal agency to review every alleged loan transaction or enact a statutory scheme that would force alleged lenders to comply with the law.

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As illegal lending practices continued, Congress created a statutory scheme for the enforcement of lending laws by the homeowner that was both procedurally and substantively highly punitive against parties presenting themselves as lenders in a loan transaction. The Courts lack both jurisdiction and authority to change legislation. Court orders that attempt to do so are void, not merely voidable. 

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15 USC §1635 was enacted to enable homeowners to eliminate the note and mortgage, replacing it with a statutory scheme for recovery on the underlying debt if and only if the purported lender was able to comply with the statutory conditions precedent.

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The statute was triggered simply by mailing a notice of intent to rescind. By operation of law, this extinguished the mortgage lien and the note and replaced it with a scheme to recover the underlying debt by a party who owned that debt. But first, the creditor was required to return all money paid by the homeowner, file a satisfaction of lien to clear the title, and return the canceled original note. And, of course, the “creditor” was required to allege and prove that it was the owner of that debt without resorting to the note or mortgage. 

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Despite many court rulings throughout the country, the operation of the statute was triggered as an event, not a claim by the homeowner. Nothing further is required by the homeowner for the statute to operate.

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When confronted by the resistance of lower courts to the outcome of the operation of this statute, the U.S. Supreme Court decided unanimously in 2015 that the courts must follow the statute in Jesinoksi v Countrywide. That decision has never been overturned or amended. Written by Justice Scalia, the court was critical of the reckless manner in which the effects of the statute were ignored.

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This has led to a practical conundrum. The statute voids the note and mortgage, yet many courts are continuing to foreclose the note and mortgage. By law, such actions muddy the title of everyone who has sent a notice of rescission.

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Neil F Garfield, MBA, JD, 76, is a Florida licensed trial and appellate attorney since 1977. He has received multiple academic and achievement awards in business, accounting and law. He is a former investment banker, securities broker, securities analyst, and financial analyst.
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FORECLOSURE DEFENSE IS NOT SIMPLE. THERE IS NO GUARANTEE OF A FAVORABLE RESULT. THE COMMENTS ON THIS BLOG AND ELSEWHERE ARE BASED ON THE ABILITY OF A HOMEOWNER TO WIN THE CASE NOT MERELY SETTLE IT. OTHER LAWYERS HAVE STRATEGIES DIRECTED AT SETTLEMENT OR MODIFICATION. THE FORECLOSURE MILLS WILL DO EVERYTHING POSSIBLE TO WEAR YOU DOWN AND UNDERMINE YOUR CONFIDENCE. ALL EVIDENCE SHOWS THAT NO MEANINGFUL SETTLEMENT OCCURS UNTIL THE 11TH HOUR OF LITIGATION.

But challenging the “servicers” and other claimants before they seek enforcement can delay action by them for as much as 14 years or more. In addition, although currently rare, it can also result in your homestead being free and clear of any mortgage lien that you contested. (No Guarantee).

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If you wish to retain me as a legal consultant please write to me at neilfgarfield@hotmail.com.

Please visit www.lendinglies.com for more information.