Raising TIL Claims

Hi Paul–I read through some of your site and had a question I was wondering if you could answer.

If a homeowner lost their home through foreclosure, and later found violations of the Truth in Lending Act, would they be able to to have an unlimited period to recoup those monies? Would the state’s statute of limitations come into play?

Elisa

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Hi Elisa,

The time to raise TILA claims is defensively at the onset of the foreclosure proceedings.  Upon the disposition of the foreclosure case, TIL claims are generally barred by collateral estoppel, res judicata, and/or the Rooker-Feldman doctrine. 

With regards to extended rescission, Reg Z § 226.23(a)(3) reads (in part, emphasis added): “If the required notice or material disclosures are not delivered, the right to rescind shall expire three years after consummation, upon transfer of all of the consumer’s interest in the property, or upon sale of the property, whichever occurs first.”

And in that case, the answer to your question would appear to be no.

Thanks for the questions and hope this helps.

Paul

This author is not an attorney and this information should not be considered legal advice.  Please consult an attorney for legal advice.