Tag Archives: mortgages

SCOTUS Sides with Homeowners with TILA Interpretation

SCOTUS Clarifies TILAIn case you missed it, here’s a link to the United States Supreme Court’s decision in Jesinowski et ux. v. Countrywide Home Loans, Inc., et al. I have also embedded the decision below.

This is a nice win for homeowners, because it is the final word on rescission. SCOTUS sided with the homeowners on this one, holding that borrowers exercising their right to rescind mortgages under the Truth in Lending Act (“TILA”) only need to provide written notice to creditors within three years of the loan being issued. They are NOT required to bring a lawsuit within that period.

Also, note that SCOTUS only addressed the when of the notice and not the how, because TILA doesn’t say anything about how notice is to be given.

You probably remember that TILA gives borrowers the right to rescind certain loans up to three years after the loans were issued when the borrowers do not receive the required disclosures. TILA provides that a borrower “shall have the right to rescind … by notifying the creditor … of his intention to do so.”

Homeowners rights were expanded under TILA in 1980, and since then, the courts have interpreted the Act differently. That meant that in some federal courts, homeowners were only required to give notice within the three years, and in others they were required to file a lawsuit.

And we all know how those lawsuits fared — most of them were losers for homeowners. How many homeowners raised TILA issues in lawsuits only to be shut down by courts?

Based on my work in foreclosure defense, it seems like much of the changes have happened too late, but perhaps we’ve all paved the way to preventing this from happening to others. And it seemed like 2014 was the turning point for more developed case law.

I’ve seen most of my clients get great outcomes in their cases. Ultimately, I am most happy about the case decisions we’ve seen, like this one and of course, Steinberger. If you fought in the courts and lost (as I did), take heart: each one of those losses has ultimately led to more protections for homeowners.

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Focusing on What Works in Foreclosure Defense

Focusing on What Works in Foreclosure DefenseYesterday as I was on Facebook, I saw Mark Stopa’s post on the Pino case in Florida. His post essentially answers a question he and I both apparently get asked a lot, which is “Why aren’t you focusing on foreclosure fraud?”

Foreclosure defense has become just like any other legal practice area: what are the facts of the case, what evidence do you have, and what can you make out of it?

Mark Stopa says it very well:

“The other day, a friend on Facebook asked me why I don’t spend more time defending foreclosures by talking about foreclosure fraud.  Well, this blog shows why.  Regardless of what I think about it, those arguments don’t work. The judges just don’t like them. And whether I like it or not, Florida courts just aren’t going to create a system that prevents homeowners from getting foreclosed (certainly not on any widespread basis) based on foreclosure fraud.

Suppose you’re playing cards. Do you whine and complain if you get a crummy hand? Quit? Or do you play the best you can with the hand you’re dealt?

For me, that’s what foreclosure defense is – doing the best you can with the hand you’re dealt. I don’t like all of the rules/laws. I don’t always have a great hand. But I play the best I can with the hand I’m dealt.”

Aside from Mark’s point, there are already enough bloggers who spend a lot of time talking about what’s wrong with everything. I’m tired of talking about foreclosure fraud. It happened, but it’s time to find another way. I would rather focus on doing what gets results.

After losing a case, a good lawyer comes up with another way to win. I probably sound like Mark Stopa’s cheerleader here, but you can read all about his Paragraph 22 argument on his blog. He’s getting results with that argument.

Barbara Forde (in Arizona) made a contractual argument and was successful in stopping a foreclosure.

Neither of these examples are foreclosure fraud arguments.

I think the focus needs to shift to what actually works instead of fighting against what’s already lost. One person said to me on Facebook, “I will never give up fighting MERS.”

Well, if you’re in Florida, you’re wasting your energy and time on a battle that’s already been lost. Mark Stopa specifically says in the same post that Florida declined the opportunity to invalidate MERS:

“Florida’s Second District Court of Appeal declined to invalidate the MERS system, instead ruling a “holder” can foreclose even without being the “owner.”  Mortgage Electronic Registration Systems, Inc. v. Azize, 965 So. 2d 151 (Fla. 2d DCA 2007).  As a result, at least in Florida, the banking industry has been able to get away with transferring notes/mortgages without a “chain of title” being recorded in the Official Records, basically by anyone coming to court with an endorsed note.  For anyone challenging the mortgage industry’s sloppy practices, Azize was strike one.”

Shifting the focus to what works DOES NOT mean there is no hope. Despite the dismal case law, many homeowner attorneys are finding other ways to keep their clients in their homes.

The best defenses I’ve seen always started with researching/auditing the loan and scrutinizing the evidence. The best evidence isn’t even hidden! It’s all public record.

So, I’d ask you: what are the facts of your case and what evidence do you have?

Find out in Loan Audit School™ or Loan Audit School for Professionals™.

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