Truth in Lending Act (tila) Mortgage Rescission
I was on the phone yesterday with a loss mitigation representative from Washington Mutual Bank. I was calling to get a specific address to send a “notice of termination” for Wamu. Every lender / bank / servicer has separate addresses for these kinds of answers. I asked the lady in the income statement Mitigation for “address I can send a termination notice.” At first, she said, “what?” “Notice to terminate the loan,” I said. “Sir, you can not terminate the loan,” she said. I said, “Madam, please just give me an address I can send official notification to terminate the loans.” She said, “Why? Did you just close this loan in the last three days because I’m pretty sure you can not just stop the loan.” I said, “Mrs. you certainly can up to three years from the date of closure effectively if it is refinance loans on primary residence and there are certain violations of truth in lending act, but I’m not going to argue with you, just give me the right e-mail address “This little back and forth madness just goes to show how even the bank / servicer employees do not know the law! The legal right to tila mortgage termination can extend up to three (3) years from the date of closing if
- There is a refinance loan business
- It is your primary residence
- It was closed in the last three years
- A forensic loan audit reveals MATERIAL visual fraction
tila mortgage rescission is COMPLETE defense foreclosure. In fact it is the most powerful foreclosure defense you might have. Why? When you perform a legitimate Tila mortgage termination, you are literally and legally loan. This is precisely what Regulation Z says, 12 CFR § 226 onwards. (“Reg. Z”) (a) Consumer’s right to cancel. (1) In the credit business where the security interest is or will be held or acquired in the main dwelling consumer, which consumer ownership is or will be security interest shall have the right to terminate the transaction. (3) … if required notice or material disclosures are not delivered right to rescind expires 3 years after enforcement …
tila mortgage rescission is real. But I have not explained to you yet WHY tila mortgage rescission is a complete defense foreclosure. What Reg. Z says (12 CFR § 226.23 (d)) is when the consumer terminates the transaction, which security interest giving rise to the right of rescission shall expire and the consumer is not responsible for any amount, including the rate (ie. or closing costs) any finance charge.
Do not know if you caught it but I bolded it for you. Yes, that’s right mortgage (security interest) will be invalid. Further, the borrower is not liable for the cost of capital. That means any / all of the closing costs and interest paid on the loan closing current is returned to the borrower as a credit against the original loan. So let’s get to foreclosure defense issue … mortgage note gives the owner the legal authority to foreclose. If the mortgage is void of law, it is no longer legal instruments to rule. The lender will be unsecured just like credit card creditors; and, by the way, the debt can be discharged in federal bankruptcy court. Security interest has been annulled by law. Foreclosure becomes a legal impossibility. Lenders do not just roll over and go away, but if they violated federal law to loan your transaction, its black and white. It is not some subjective, “he said, she said” issue. It is recognizable and measurable and can be sufficiently explained in a competent court of jurisdiction.
You want to completely correct loan audit done by knowledgeable experts. Hopefully short article will help you to see that a valid tila mortgage termination is the best cure and defense to foreclosure if you qualify for it!
In short, tila mortgage termination is the best defense (and actually break) you have to fight foreclosure. The lender will have committed a “material disclosure violations (s)” to “extended right to terminate” to give you. Do not let anyone tell you any old fraction tila or RESPA or any state law guarantees you the right to cancel. I’ve seen too many borrowers / consumers sold this part of products by people claiming to be experts or chartered accountants. Scope tila mortgage rescission is accurate but very powerful.