Hi Paul!

In your response to Breath Inside the House–the Qualified Written Request, you stated that rescission in bankruptcy would only net the lender 10cents on the dollar. Can you explain how that happens?

Do you know of any cases where this was done?

Jeramiah

Do all home loan have to have a right to cancel? Must there be a right to cancel for initial purchase mortgage loans as well?

Kaitlin (more…)

I saw your answer to Rae Jean–I though that under foreclosure rescission was unlimited?

What is the difference between rescission, recoupment and setoff?

Jansen (more…)

Hi Paul,

I have been trying to save my home and have followed your website since May 2008. I have a interest only option arm that I had a forensic auditor review and found multiple truth and lending violations. I then found an attorney who was going fight Countrywide for me to rescind the loan, or interest, etc. however he gave up on Countrywide and their antics a few months into it and refunded my retainer.I have since been working with NACA -Neighborhood Assistance Corporation of America who has just informed me that they have gotten Countrywide to agree to a fixed rate of 5% for the life of the loan.

I am not late, nor have I ever been late on a payment, but have only been able to afford the minimum payment since the loan was started 4 years ago. Therefore my principal balance has gone up, and of course my home value has gone down. So here is my question-

Does it make any sense to take the 5% interest rate without a principal reduction? I am probably 40k upside down. While the 5% fixed is very attractive (also I filed chapter 7 bk 3.08 and did not reaffirm the home) does it make any sense to stay in a home that is so upside down? I know the market is bound to come back but that could take many many years before I get right side up!

But on the other hand if I dont take the deal I wont be able to buy another home for some time due to the bk and credit. Just want your opinion. I am having a hard time knowing there are truth and lending violations and all of that interest money should be rescinded but cant find an attorney that can make that happen and I am so worn out from all of this I just dont know what to do anymore.

The 5% fixed sounds great, but the negative equity is just such a bummer- and I know alot of folks are in the same boat. What do you think?

Thanks

Rae Jean (more…)

XYZ Mortgage Company
123 Anywhere Street
Anyplace, New York 54321

RE:  Fred Flintstone Account#1234567890

Dear Sirs,

I hereby exercise my rights under the Federal Truth in Lending Act, 15 U.S.C. § 1635, Regulation Z § 226.23, to rescind the above referenced mortgage loan.  The disclosures were not made “clearly and conspicuously in writing” as required by 15 U.S.C. § 1632(a); Reg. Z. § 226.17(a).  Specifically, the Truth in Lending disclosure statement was defective for the following reason:

Conventional Fixed:  The notation on the top right of the TIL disclosure statement reads “Conventional Fixed Adjustable”.  This is misleading and unclear in violation of 15 U.S.C. § 1632(a); Reg. Z. § 226.17(a).  It is indisputable that the instant loan is an adjustable rate mortgage and not a fixed rate loan.  This type of misleading notation is similar to the disclosure violation in Andrews v. Chevy Chase Bank, 240 F.R.D. 612 (E.D. Wis. 2007) where the trial court concluded it “would not be useful to an ordinary borrower because it would cause the loan to appear more attractive than it actually was and serve no useful purpose”.  Andrews v. Chevy Chase Bank, 2008 WL 4330761 (7th Cir, Sept, 2008) was a class action and on appeal it was determined that each class member may rescind individually.  The 7th Circuit also restated: “a computer generated stamp on the top of one of Chevy Chase’s disclosure forms made the disclosures misleading.  The stamp, they asserted – which referred to the note as ‘WS Cashflow 5-year Fixed Note Interest Rate: 1.950%’ – could be understood to identify the note as a fixed-rate note.”

Pursuant to 15 U.S.C. § 1635(f), my right to rescind this loan extends for three-years as a result of this defective Truth in Lending disclosure statement.  This rescission notice has been sent to you within that time period.

Please be advised there is a short sale in process or a short sale will soon be in process with your company and I am prepared to tender the reduced payoff amount through the short sale once the proper credits have been reflected in my reduced payoff.  Alternatively, please be advised that tender may also be made through bankruptcy [Jaaskelainen v. Wells Fargo Bank, N.A. (In re Jaaskelainen), 391 B.R. 627 (Bankr. D. Mass. 2008)], although I would prefer a short sale and this is not an area that I have explored, yet I do feel I would qualify and this information is provided as formal notice that tender is available once the credits have been made through one of these options.

Additionally, please consider this letter a “Qualified Written Request” per RESPA and as such I am demanding an accounting of my loan including the following: loan disbursements, charges, all payments paid to date, and the principal balance.

Please be advised that your security interest in my home is now void per 15 U.S.C. § 1635; Regulation Z § 226.23 and you have twenty-days to return all of the payments I have made on this loan and to do your part to terminate the security interest in my home.

Thank you for your immediate attention to this matter and govern yourself accordingly.

Fred Flintstone
(555) 555-5555
100 Bedrock Lane
Flint, Michigan 98765
——————-
The letter listed above is provided for informational purposes only.  Broken Credit, LLC and/or its principals do NOT give permission for copying or reproduction of this letter in any way, shape, or form.  You must always consult an attorney for legal advice.  We are not attorneys.

We have a house in Bradenton, Florida that was purchased as a primary residence at the height of the price escalation. Due to some job changes and income changes, we can no longer afford the payments and we are trying to do a short sale as you can imagine the house is worth a lot less than we owe. The 1st mortgage is with US Bank and we have an equity line with Wells Fargo. After several calls over serveral months and little or no help from US Bank, the latest is they will not do a short sale as long as there is another lien on the property. We called Wells and they said we could try and settle the equity line which they will usually do for 60 – 80% of the balance but we don’t have the money to settle for that much. Rep at Wells said they have never heard of a 1st mortgage holder not allowing a short sale because of a second mortgage or in our case an eqity line.

We are currently three (3) months behind with US Bank, not behind with Wells. We tried on several occasions to discuss alternaties with US Bank before we got behind but they would not discuss anything, we feel because we were not behind at that time.

Are there any alternatives other than just letting the property go into foreclosure?

If US Bank forecloses what are the chances that Wells will get anything?

Can either of the lenders come after us for the remaining balances on either loan?

I can understand the lenders not wanting to loose any more than they have to but foreclosure seems a lot worse for everyone because there is no doubt the property won’t be maintained, will look terrible when it is tryig to be sold and will bring a lower price than if they would allow us to maintain the home during a short sale, which we are still doing, and hopefully get as much value out of it as we can.

US Bank’s attitude towards this situation really just doesn’t make a whole lot of sense unless there is something “behind the scenes” that we don’t know about that benefits them more, maybe some additional amunition for more “bail out money.”

Joe (more…)

I submitted for loan mod & was denied. The Trustee sale is 6 Mar 2009. Im looking for loan at current market value. Should I try TILA or foreclosure course of action. Not much time.

Rosana (more…)

If the real finance charge is over the amount listed on the Truth in Lending statement–is that rescissionable?

Linda (more…)

Do tila violations apply to non-primary homes ? Can you recommend a Tila violation attorney in central florida?

Pat (more…)

In this case, as discussed above, the NORTC forms that were provided to the Original Borrowers with respect to both loans were insufficient to notify Plaintiffs of their respective rescission rights.  Thus, pursuant to TILA, Plaintiffs’ rights to exercise rescission on both loans were extended to three years from the respective dates of the closings on both loans.

Since neither Encore nor HSBC complied with Plaintiffs’ rescission demands within 20 days of the date that notice of rescission was received, Encore and HSBC are also subject to damages under TILA. See 15 U.S.C. § 1640(a).

Harris v. OSI Financial Services., Inc. et al, No. 07 C 3552, 2009 WL 212138 (N.D. Ill. Jan. 29, 2009)