Certified Forensic Loan Auditors, LLC

  Upcoming Classes

Regulation Z - 12 CFR 226 et. seq. - Notice of rescission under TILA - Tender Requirements

morganlewis.com | January 27, 2015

A notice of rescission under the Federal Truth in Lending Act (TILA) is the topic of this issue of the newsletter. In the recent case of Jesinoski v. Countrywide Home Loans the United States Supreme Court ruled unanimously that a borrower exercising their right to rescind under TILA is only required to provide written notice to their lender within the 3-year period, they are not required to file any lawsuit within that period.

Notification that a homeowner is exercising their right to rescind may be given by the service of a notice of rescission which is sent under the provisions of TILA which are found in 15 U.S.C. section 1635 and also by the provisions of Regulation Z found in 12 C.F.R. 226.23(b)(5). 15 U.S.C. §1641(c) states that the right of rescission applies to any assignee of the obligation.

Careful consideration of both the unique circumstances and facts of any given situation should be given before any decision is made as to whether or not to serve a rescission notice under TILA to a lender or their assignee.

A homeowner should consider serving a notice of rescission if they are contending that the lender violated TILA for one or more reasons including that the disclosure statement was defective in some way such as a failure to disclose the Annual Percentage Rate (APR) or an under-disclosure of the APR and/or finance charges, existence of a variable rate feature, total amount financed, total of the payments, or a failure to provide copies of other required notices such as in a refinance transaction where each borrower or person with ownership interest in the property did not receive two copies each of the federally required notice of right to cancel, failure to properly disclose the date or dates that the rescission period expires, etc. If each borrower or person with ownership interest in a refinance transaction was not provided two adequate copies of this Notice, an extended three year right to rescind is permitted under TILA.

Valid service of a rescission notice by a homeowner on their lender or their assignee renders any security interest in the real property completely void pursuant to 15 U.S.C. § 1635; Regulation Z, § 226.23 and the lender has twenty days to return all of the payments made by the homeowner on the loan and to terminate their security interest in the real property. A homeowner may wish to turn over possession of the real property to the lender if the situation warrants it.

Note however that in some circumstances the homeowner may have to tender money in some circumstances if they wish to remain in possession of the real property although there are some published cases suggesting that a Court can exercise its “equitable discretion” under TILA and allow the borrower to make payments over time as part of meeting the borrower’s tender requirement such as reducing the monthly payment over a period of time. See In re Stuart, 367 B.R. 541, 552 (Bankr.E.D.Pa.2007); Shepeard v. Quality Sliding & Window Factory, Inc., 730 F.Supp. 1295 (D.Del.1990) (allowing borrower to satisfy tender obligation by making monthly payments), and Mayfield v. Vanguard Sav. & Loan Ass’n, 710 F.Supp. 143, 149 (E.D.Pa.1989) (allowing borrower to satisfy tender obligation by making monthly payment).

Attorneys or parties who would like to view or download a sample notice of rescission under TILA available in Word or PDF format created by the author click here.

Richard, Stan Burman sells over 250 sample legal documents for California and Federal litigation. To view portions of these documents, or to search for a particular document click here for more details.


Nancy Duffy McCarron, CBN 164780
Attorney, Real Estate Broker, BBB Arbitrator, CA Notary Public
Certified Forensic Loan Auditor, Property Manager


Back to Letters from the Editor Archive

CFLA was founded by the Nation's Leading Foreclosure Defense Attorneys back in 2007 to serve the Foreclosure Defense Industry and fight pervasive Bank Fraud. Since opening our virtual doors, CFLA has rapidly expanded to become the premier online legal destination for small businesses and consumers. But as the company continues to grow, we're careful to hold true to our original vision. For us, putting the law within reach of millions of people is more than just a novel idea—it's the founding principle, just ask Andrew P. Lehman, J.D.. With convenient locations in Houston and Los Angeles, you can contact Our National Account Specialist and General Manager / Member Damion W. Emholtz at 888-758-2352 for a free Mortgage Fraud Analysis or to obtain samples of work product, including cutting edge Bloomberg Securitization Audits, Litigation Support, Quiet Title Packages, and for more information about our Nationally Accredited and U.S. Department of Education Approved "Mortgage Securitization Analyst Training Certification" Classes (3 days) 24 hours for approved CLE & MCLE Credit (Now Available Online).

SEE BELOW- http://www.certifiedforensicloanauditors.com

Call us toll free at 888-758-2352

Bookmark and Share
Facebook Like us on Facebook
Twitter Follow us on Twitter
YouTube View our YouTube Videos
LinkedIn Connect to us on Linkedin
BBB Logo


Contact us or view our Sample Documents & Audits by completing the form below.

  • Reload
  • Should be Empty:

International Bloomberg Securitization Audits


DVD Sets Only $99


FREE Mortgage Fraud Analysis


Order Cutting-Edge Services Now


Quiet Title Packages from Licensed Attorneys


Affiliate Services


CFLA Sponsored Attorney Links


Take-Home Education Package