If you want to know HOW to STOP a Foreclosure, a Truth in Lending Act (TILA) Mortgage Rescission is the key.
I was on the phone yesterday with a loss mitigation rep from Washington Mutual Bank. I was calling to get the specific address to send a “Notice of Rescission” to for WAMU. Every lender/bank/servicer has specific addresses for these types of correspondence.
I asked the lady in Loss Mitigation for the “address that I can send a rescission notice to.” At first, she said, “a what?” “A notice to rescind the loan” I said. “Sir, you can’t rescind a loan” she said. I said, “ma’am, please just give me the address I can send an official notice to rescind the loan to.” She says, “why? did you just close on this loan within the last three days because I’m pretty sure you can’t just cancel a loan.”
I said, “ma’am you most certainly can, up to three years from the date of closing actually if it’s a refinance loan of a primary residence and there are certain violations of the truth in lending act; but I’m not going to argue with you, just give me right address!”
This little back and forth madness just goes to show how even the banks don’t know the damn law! A legal right to TILA mortgage rescission can extend up to three (3) years out from the date of closing if:
- It’s a REFINANCE loan transaction
- It’s on your PRIMARY residence
- It was closed in the last THREE years
- A forensic loan audit reveals a MATERIAL disclosure violation
Many people ask me how to stop a foreclosure… folks, TILA mortgage rescission is a COMPLETE defense to foreclosure. In fact, it is the most POWERFUL foreclosure defense you could have. Why?
When you effect a TILA mortgage rescission, you are literally and legally canceling the loan. Here’s exactly what Regulation Z says,
12 C.F.R. § 226 et seq. (“Reg. Z”)
(a) Consumer’s right to rescind. (1) In a credit transaction in which a security interest is or will be retained or acquired in a consumer’s principal dwelling, each consumer whose ownership interest is or will be subject to the security interest shall have the right to rescind the transaction, except for transactions described in paragraph (f) of this section.
(2) To exercise the right to rescind, the consumer shall notify the creditor of the rescission by mail, telegram or other means of written communication. Notice is considered given when mailed, when filed for telegraphic transmission or, if sent by other means, when delivered to the creditor’s designated place of business.
(3) The consumer may exercise the right to rescind until midnight of the third business day following consummation, delivery of the notice required by paragraph (b) of this section, or delivery of all material disclosures,48 whichever occurs last. If the required notice or material disclosures are not delivered, the right to rescind shall expire 3 years after consummation, upon transfer of all of the consumer’s interest in the property, or upon sale of the property, whichever occurs first. In the case of certain administrative proceedings, the rescission period shall be extended in accordance with section 125(f) of the Act.
12 C.F.R. § 226.23(d)
(d) Effects of rescission. (1) When a consumer rescinds a transaction, the security interest giving rise to the right of rescission becomes void and the consumer shall not be liable for any amount, including any finance charge.
(2) Within 20 calendar days after receipt of a notice of rescission, the creditor shall return any money or property that has been given to anyone in connection with the transaction and shall take any action necessary to reflect the termination of the security interest.
(3) If the creditor has delivered any money or property, the consumer may retain possession until the creditor has met its obligation under paragraph (d)(2) of this section. When the creditor has complied with that paragraph, the consumer shall tender the money or property to the creditor or, where the latter would be impracticable or inequitable, tender its reasonable value. At the consumer’s option, tender of property may be made at the location of the property or at the consumer’s residence. Tender of money must be made at the creditor’s designated place of business. If the creditor does not take possession of the money or property within 20 calendar days after the consumer’s tender, the consumer may keep it without further obligation.
(4) The procedures outlined in paragraphs (d) (2) and (3) of this section may be modified by court order.
Don’t know if you caught that above but I bolded it for you. Yes, that’s right the mortgage (the security interest) becomes VOID. Further, the borrower is NOT responsible for ANY finance charge. That means any/all closing costs and interest paid on the loan from closing to current is refunded to the borrower as a credit against the original loan amount.
So, let’s get to the foreclosure defense issue… the mortgage gives the owner of the Note the legal authority to foreclose. If the mortgage is voided, there is no longer any legal instrument to foreclose on. The creditor becomes unsecured just like a credit card creditor. The security interest has been voided by operation of law. Foreclosure becomes a legal impossibility.
The lenders don’t just roll over and go away but folks, if they violated the federal law in your loan transaction, its black and white. It’s not some subjective he said, she said issue. It’s recognizable and quantifiable. You absolutely want a forensic loan audit done by a knowledgeable analyst. If you’d like to retain me for my audit services, go to my contact page and get a hold of me.
Hopefully, this short post will help you see that a valid TILA mortgage rescission is the best remedy and defense to foreclosure if you qualify for it!
What if the loan was closed 4 years ago, but otherwise fits your description. No go? Won’t work?
Your statutory right to rescind expires at 3 years. You can still use the violations as claims in defense by recoupment.
We meet all of the above criteria.The origination and the refinance were fraudulant by the same originator.I attempted to have an audit done but did not have the fees to pay him.He gave me a partial audit free but since I do not have this data in writing,I can not take it to court.I am still within the statue of limitation.How much is your audit
Thank you, I have a question for rescission extension period, if your 3 years is just about over, and if you are allowed California’ Bill ABX2 7 which give an add’l 90 days to the borrower beyond the 3 months of the NOD period
can we have the right to rescind extend beyond its 3 year time. We are waiting for answers from our QWR to lender and as they have 60 business days to respond to that it will go beyond our notice of default 3 months period and we would be in danger of the filing of the notice of sale, right?
question 2
is a Notice on Non Compliance an appropriate paper to record to deny lenders due diligence?
do you use a software program only for your forensic audits? any details on what you include in the audit? is there a website where i can see more?
are you an attorney?
oh yeah in reg Z is says the rescission period shall be extended in accordance with section 125(f) of the Act. where can i find that info please. thanks in advance for any info you can provide.
You are the "grantor" in contol and have the right to place any time frame in honor on your demand to reply. To put the bank on notice you can give 3 – 72 hour
1. Notice
2. notice of non-response
3. Notice of default opportunity to cure
4.. Notice of Default
Locate a Notary Acceptor in your local and for fee's that vary they will send out your paper works and receive the responses on each your notorized document.. You must be very carful in the language that you use also. For instance the word "alledged" account. Begin researching Common Law Remedies.
With your time crunch there is a wonderful …research google…
27613349-killer-qwr-20 page
Also: On all of the letters have the word "AFFIDAVIT" in front of QWR or Notice, etc. An affidavit is the only thing that will stand up in court.
After reviewing my loan documents, I sent a Notice to Rescind to the present mortgage holder. They simply sent back a letter stating i am not eligible to rescind. I am presently in Foreclosure and I raised the defense that the mortgage was cancelled due to rescission. It has been 5 months since i sent my notice to rescind and 4 months since i filed my foreclosure defenses. My quesiton is, what were they required to do once they received my notice to rescind. Is their form letter sufficient to negate the right to rescind? It has been 5 months do I still have to prove TILA violations?
Alfonso,
YOU HAVE THE BEST DEFENSE IN THE WORLD. GOOGLE \’NOTICE OF RESCISSION\’ AND START TO READ.
yOU HAVE TO GET OFF YOUR BUTT. NOBODY IS GOING TO GIVE YOU A HOUSE. UNLESS OF COURSE YOU UNDERSTAND THE POWER YOU HAVE WHEN YOU RESCIND YOUR LOAN.
Who, exactly should I serve the notice of recession on? Must it be the registered agent of the corporation, that you serve with lawsuits? Or the loan department of the bank that gave you the refi? I served my lender in January, 2009 and I was ignored. So I filed a lawsuit against them. I restated my rescission in the lawsuit but I have never been acknowledged by the lender. In fact it was National City Mortgage/ National Vity Bank and I just learned that they were taken over by PNC on Dec. 31, 2008. Their lawyers never divulged that the company no longer exists. Any good advice for me, please?
What is the time limit to rescind a loan when fraud has been committed by the lender? A loan was taken out in 2000 and we never received a copy of the TILA (Disclosure Form) in 2007 we requested copies of the loan and received a copy of the TILA (Disclosure Form). The finance charge and interests rate and amount of the loan are different from the amounts on the paperwork we did receive. Also the signatures on the TILA are clear forgeries. For two years we have been trying to get straight answers from the lender without success. I wonder, because of the circumstances, I could file to have the loan rescinded.
To rescind this loan you will have to use your state statutes to bring a claim for rescission. You only have three years from the date of consummation under the Truth in Lending Act to rescind for material disclosure violations. The three years is a hard and fast date. No wiggle room on that. Fraud in the inducement or something similar, if it can be proven, may be a viable option to rescind or cancel the loan. This is a question for a good litigating contract attorney.
Jen – the July 20, 2006 date is the only date that can be used for calculating the various statutes of limitations (SOL) as it applies to the Truth in Lending Act. The act uses the "date of consummation" as the date for calculating SOL issues. Any TIL violations you or an auditor that is hired to audit your loan file can be used as "claims in defense by recoupment" as there is no SOL for violations used as Claims in Defense by Recoupment. I have a blog post or two on this specific issue. Please feel free to post more questions if you have some. Thanks, Lane Houk.
In Georgia, who can I contact for assistance with a motgage recission?
Thanks for this list… i found exactly what i needed….
Also check out the Common Law Court for this is where you willhave to go for Remedy.
Very IMPORTANT FIRE THE BANK'S TRUSTEE & BENEFICIARY. immediately!!!!
Family members of trust worthyness and or your all caps name (you will have to research this stuff), is your highest solution. Also research recording it at the Record of Deeds office in your local to the "DOMICILE", NEVER YOUR HOME use c/o in front of the address, always.
There is so much to learn but this is a healthy and wonderful beginning. Keep FAITH in your heart and the right information will always connect in your heart as true, success to you.
the scribd.com is a wonderful site also…the word soveriegn is a great word for researching into. bye
Hi I'm from Minnesota do you know where the closet and one of the more informed forensic loan auditor is in my area and what to expect to pay for one? Thanks Tony