Confronting the "Motions" Filed Against Rescission

Several attorneys are sending me their motions or opposition to motions directed against the rescission. My observation is that they have not taken the time to think about what they are doing and the real reason they are pursuing rescission. The real reason is standing. What you cannot accomplish through the front door you can definitely accomplish by coming in through a side door. It isn’t enough to summarize your position, you must go for the jugular on this.

The motion filed is good although missing a key component that should be expressly stated.

*The court may not rule on anything unless it has jurisdiction.

*Rescission is effective as a matter of law on the day it was mailed. A party may only contest or dispute the rescission if they file a lawsuit seeking to vacate the rescission. The only party that can file such a suit is the actual creditor — the party at the end of the chain to whom the money is allegedly owed.

*All other parties are barred for lack of standing, to wit: an effective rescission voids the note and mortgage (see 15 USC 1635, Regulation Z, and Jesinoski v Countrywide). No party in any court can get relief based upon a void instrument.

*The only thing left after rescission is the debt; hence only the owner of the debt has standing. The banks want the court to presume that they own the debt since they had the paperwork. But if the last 8 years has taught us anything, we know that the paperwork does not reflect the actual transactions where money exchanged hands.

*The only jurisdiction this court had was based upon the allegations based upon the note and mortgage. The rescission removed the note and mortgage as valid instruments as of the date of mailing the rescission. Hence unless one or more of the parties allege that they are the owner of the debt and the end of the line in the “chain” (and then prove it) none of the existing parties have standing to dispute the rescission which, as Justice Scalia said on behalf of a unanimous US Supreme Court, was effective on mailing regardless of whether it was disputed or not.

*The only relevant statute of limitations at this point is the 20 day window in which the lawsuit disputing the rescission could have been filed. That has expired in most cases, but it doesn’t stop the owner of the debt from filing the lawsuit, since the statute of limitations is an affirmative defense unless it is clear on the face of the complaint and exhibits that the 20 day window has expired, in which case the homeowner may move to dismiss the challenge to the rescission as untimely.

*The same logic applies to the rescission itself. If the rescission itself states that the transaction was consummated on a certain date, THAT starts the clock counting off the three years. But in all events the rescission is effective — and whether or not the true owner of the debt can step forward and establish standing, sue to vacate the rescission is unknown.

*Although theoretically a lawsuit is still necessary and the party seeking to void the rescission probably doesn’t have standing, it is a tougher road to argue about forcing the other side to file a lawsuit that, assuming there is standing, you will lose. Any effort to contest the existence of consummation will be rejected if you have already admitted it. So while you definitely have the upper hand if you do not admit consummation and do not admit the date of consummation you still can stay in the game by demanding that the court not rule on something over which it has no current jurisdiction — because the rescission, disputed or not, is effective on the date of mailing, the note is void and the mortgage is void.

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