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NOTE; THE NEIL GARFIELD SHOW WILL RESUME ON THURSDAY SEPTEMBER 10, 2015 6PM EDT
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I’m in trial mode so I just wanted to post some articles that I found interesting. My own opinion is exactly what is expressed in this article about when consummation has occurred. And that is a question of fact that is neither obvious nor a closed matter when the true creditor’s identity has never been revealed and continues to be withheld. The banks seem to want to say that the borrower has no right to learn the identity of his or her creditor, on the one hand, but that the court must assume that a valid contract exists — even without any evidence as to who the party is on the lender side.
The banks are using the argument that it is obvious that a loan from 2004 can’t possible be subject to rescission because of the three year limitations. Being obvious is not a legal theory or procedure. If they want to say that consummation occurred on a certain date then they need to prove it. The contract must be complete for the loan contract to be enforceable. That is black letter law. If I somehow trick you into signing a note and mortgage that does not create a loan contract — unless I loan you money. “it’s obvious” is no defense.
They must show not that it is obvious but that it is true. AND they can’t do that because their paperwork talks about transactions that never existed nor were consummated starting with origination and continuing up the so-called chain of claims.They will fight for the “obvious defense” simply because they don;t have a creditor and therefore they don’t have standing to even raise the issue, which is why they regularly blow the 20 day limitation on either complying with TILA statutes or vacating the rescission which is the equivalent of a court order because it is effective by operation of law according to TILA, Scalia, and everyone else.
On equitable tolling, I think that is a trap. Technically I think it ought to apply but it seems fairly clear to me that arguments about equitable tolling will probably result in decisions for the lender side. I think that is wrong. But it is reality. Concentrating on equitable tolling is going to be tough going.
But challenging whether the loan was ever consummated is much easier because ultimately the only defense they have is to show the actual transactions in which the money was loaned, who loaned it, who sold it, who bought it along with proof of payment. This challenge reflects one of the main purposes of national policy as set forth in Federal Truth In Lending Act.
What the author is saying and I agree with him is that we can stick with industry standards on when the consummation occurred and challenge whether consummation ever occurred. Either way the remedies are virtually identical. Either it is rescinded or never happened.
That is application of the same industry standards in lending as applied to borrowers — if a borrower goes into a bank and wants to borrow money based upon receivables, notes, mortgages or anything else, the prospective lender is going to want to confirm the existence or nonexistence of the receivables or loan or note and whether the borrower asserts any defenses. It is called estoppel information. If the same bank wouldn’t accept partial information, (like “business records”) from us applying for a loan why should we accept anything less from them in enforcing the loan? They set the rules. Let them live or die with the standards they invented.
I like this one from a California lawyer 4 years ago:
It seems fair to say that the Courts are not willing to find a contractual obligation exists under State Law until a true and actual lender is identified. “Pretender lenders” – as Neil Garfield calls them – and intermediary “originators” who make false representations to the effect that they are “lending money”and are your “lender” should not be sufficient to set the three year TILA rescission clock in motion. Until the real Wall Street entity, or Wall Street Investor, or true source of the table funded loan is identified, the loan should not be deemed “consummated” under TILA and the three year right to rescind should remain open until such disclosure is made. That is TRUTH IN LENDING WHICH IS THE WHOLE POINT OF TILA IN THE FIRST PLACE.
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Filed under: foreclosure | Tagged: consumamtion of loan transaction, equitable tolling, identity of creditor, identity of lender, three year statute of limitations | 31 Comments »
