TILA Rescission Case results in Mortgage eliminated – forensic loan audits do have a place in the loss mitigation marketplace and can lead to a valid TILA rescission.
Okay, this is a real interesting case. A California homeowner from Westminster California pulls off a HUGE Truth in Lending / Quiet Title win against Chase mortgage. Validating the need to obtain a forensic loan audit when you have a loan (refi loan) originated within the last three years and suspect there may have been material truth in lending violations in your loan file.
As we have discussed on many other blog posts, including on our site http://www.rescindmyloan.net IF YOU HAVE A REFINANCE LOAN TRANSACTION WITHIN THE LAST THREE YEARS AND YOU ARE FACING A FORECLOSURE (OR EVEN IF YOU ARE NOT FACING A FORECLOSURE BUT WANT TO SEE IF YOU HAVE ANY LEGAL RIGHTS WORTH PRESERVING), you should consider having a Truth in Lending (“TILA”) forensic loan audit performed to see if you have an ability to excerise “extended three year rescission rights.” Yes, that’s right, where you have material TILA violations in your loan documenhts (ex. under-disclosure of the APR or finance charge, and/or failure to receive two copies for each borrower or person with a security interest in the property) you have a LEGAL RIGHT to rescind your loan as against your current lender – which includes those secret lenders which the loan servicers are trying to protect, like the trustee of a securitized loan trust, etc. Why? TILA rescission rights apply TO ALL ASSIGNEES OF THE LOAN. Trust me when I tell you, this is not something the “lenders” want to deal with.
Under TILA, when you rescind your loan, the security interest is automatically void and the lender must return all monies received in connection with the loan and the borrower has no obligation to pay any finance charges. The key is the identify the TILA violation through a forensic document examination, and then to submit a valid rescission letter to all appropriate parties. Once you do this, technically speaking, the lender must acknowledge your request to rescind and takes steps to reflect cancellation of their security interest.
What happens is when this right is exercised, normally the lender will ignore it, or dispute it altogether. TILA is desiged to be a self-enforcing rememdy and it is a “consumer protection statute” that is to be “liberally construed to protect borrowers against the mighty banks who are in the best position to ensure TILA compliance by giving clear and conspicouos disclosure of the cost of credit and other meaningful disclosures essential to a consumer credit transaction.
Well in this case (Nguyen v. Chase Bank), the Plaintiff, GOING IN PRO PER WITH A VERY WELL WRITTEN COMPLAINT, socked it to Chase who was also confronted with questionable conduct that it was argued violated the preliminary injunction obtained by the savvy Plaintiff.
The Plaintiff sent in his rescission letter and made an offer to tender which was rejected by Chase. Under TILA, the borrower must also tender back the loan proceeds received minus what they are owed the lender. When Chase rejected the tender offer, the Plaintiff sued for TILA violations, Forgery, Rescission, and other damages. Mr. Nguyen obtained a preliminary injunction. The Defendants, despite the injunction, filed a Notice of Sale acting in complete indifference to the Plaintiff’s Federal TILA rights.
At the end of the Day, the judge issued an order that “the Deed of Trust recorded with the Orange County Recorder……is WHOLLY VOIDED……..THAT A DEED OF RECONVEYANCE ISSUE……ALL ADVERSE CLAIMS AGAINST THE PROPERTY ARE QUIETED…….AND THAT THE PROMISSORY NOTE IS RESCINDED…….
Folks, if you were wondering why we have been shouting from the rooftops that if your refi loan was in the last three years, you should get a mortgage documents analysis from a qualified loan auditor or legal professional. This case shows the potential power of TILA, as we state on our website, is perhaps “your most powerful weapon” to battle and win the war on foreclosure.
Even if you are working with a modification company, or “attorney-backed” firm, or even a law firm, if your loan is within three years, DO NOT NEGLECT TO GET A GOOD SOLID TILA ANALYSIS AND DISCUSS A TENDER LITIGATION STRATEGY WITH A TRUTH IN LENDING LAWYER. THE HOUSE YOU SAVE MAY BE YOUR OWN.
Mr. Nguyen, my hat is off to you for a job well done.