livinglies.wordpress.com | February 8, 2015
For lawyers only: Many homeowners are going back and digging up their notices of rescission. There are cases in state court, federal court and bankruptcy court that could be and probably are effected by the US Supreme Court decision that made it clear that TILA rescission was a unique statutory remedy and that the common law right of rescission should not be used to interpret the explicit statutory remedy that is TILA Rescission.
Borrowers/debtors are filing motions to set aside previous rulings by courts who assumed that the rescission was only effective when a court says so (the common law rule rejected unanimously by the Supreme Court) and that tender of the money was required for the rescission to be effective (also rejected by the U.S. Supreme Court). The Banks have reacted predictably — trying to enforce the previously incorrect rulings of the court by virtue of res judicata, collateral estoppel or even “law of the case.” Remember that state laws and rules of procedures will affect the ability of borrowers to go back into litigation that has been concluded even if it is on false premises.
I would file a short reply saying something like “Defendants continue to argue a point not in issue in an blatant attempt to appeal to the Court’s personal views or inclinations. Plaintiff does not seek a free house and never did. Plaintiff’s goal is very simple: If the defendants were not the owner or representative of the owner of the debt, note and mortgage and lacked any authority to pursue collection or enforcement, then they should not be permitted to pursue a strategy in which the defendants get a “free house.”
The US Supreme Court made clear that the requirements of TILA are clear and must be strictly construed — apart from any common law notions of fraud or rescission. The Federal statute is clear in stating that the Plaintiff’s issuance of a notice of rescission produced two results: (a) the note and mortgage are nullified by operation of law (although the debt remains) and (b) if the “lender” seeks to contest the rescission, they must do so within 20 days by the Lender filing a lawsuit, which it is uncontested that the Defendants no such action was filed. If the note and mortgage were nullified by “operation of law” (quoted from statute) there is no logic or legal argument that can make it otherwise.
There is no authority that makes the notice of rescission void. “Lenders” may challenge it within 20 days and if they don’t they have waived their “defenses” or “Claims.” The point of the nullification of the note and mortgage by operation of law is to provide the borrower with the capacity to seek out alternative financing (to pay the existing debt to the “lender”) which could only be achieved if the Defendant’s mortgage and note were removed from the title chain. The 20 days in which the “lender” just sue to set aside the rescission has long expired. And the Defendants still have not filed such a suit. They have waived their defenses or claims regarding the rescission by operation of Federal law. These are not theories. They are explicit statements by the US Government aimed at leveling the playing field between borrowers and lenders, reinforced by the short opinion rendered by Justice Scalia for a unanimous Supreme Court. ”
It is not the borrower that must tender payments. It is the lender that must tender payment, disgorgement and reimbursement for every penny paid by the the borrower in connection with the loan including at closing and all monthly or other payments thereafter. Nothing could be more clear in the statute. And now the US Supreme Court has said exactly that — courts that apply common law rules to rescission are wrong when it comes to TILA rescission. The various “defenses” and “claims” of the “lenders” are waived unless they bring suit within 20 days from the notice of rescission. There are no exceptions in the Federal Statute.
The subject mortgage and note did not exist after the notice of rescission. That is the express terms of the law. Hence any action to enforce or collect under the terms of the note or mortgage or deed of trust were void, ab initio. No court would even have subject matter or personal jurisdiction to consider a controversy regarding a nonexistent note and a nonexistent mortgage or deed of trust. Further, the defendants were obligated to send a satisfaction of mortgage and canceled note to the borrower after rescission. Defendants are seeking to have the court ratify Defendant’s violation of the express provisions of the Federal Act. In essence they are arguing that even though the US Supreme Court says otherwise, that the notice of rescission should be ignored. There is no higher authority than the US Supreme Court. One is left to ask, upon what source of authority the Defendants rely that is higher than the US Supreme Court speaking unanimously.
Nancy Duffy McCarron, CBN 164780
Attorney, Real Estate Broker, BBB Arbitrator, CA Notary Public
Certified Forensic Loan Auditor, Property Manager
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