20 days for the Banks to File Lawsuit or Waive Any Claim Against Borrower's TILA Rescission

Jun 22, 2015

NEW FEATURE: YOU KNOW THERE IS SOMETHING STUPID GOING ON: You know there is something stupid going on when the banks have us thinking that our FICO score is more important than having money. Isn’t that the real reason wages stagnated (replacing wages with debt)?

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For further information please call 954-495-9867 or 520-405-1688

This is not a legal opinion on your case. It is no substitute for an opinion from local licensed counsel who has done the research through Jesinoski.

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So the question that is coming up is the wrong question.”How do we know the bank’s defenses can’t be raised after 20 days.” The very fact that anyone asks that question means that they either have not read or perhaps did not understand the US Supreme Court in Jesinoski. The bank’s CLAIMS are not DEFENSES. They can’t be raised as defenses because rescission is full, final and complete the moment it is dropped into the mailbox. Reading conditions or contingencies into the TILA statute is wrong. In fact, it is illegal and unconstitutional.

The question people are asking shows that many lawyers and many borrowers still don’t understand the simplicity of rescission under TILA. Everyone seems to reading into it the same way the thousands of courts in millions of decisions did — who were reprimanded by Justice Scalia speaking for a unanimous Supreme Court in Jesinoski. The Supreme Court says, in essence “STOP reading into the statute.” Nobody has a right to do that when the statute is clear on its face. Any attempt at interpreting conditions into TILA rescission is wrong and always has been wrong. AND THAT MEANS THAT RESCISSION IS EFFECTIVE BY OPERATION OF LAW ON THE DAY WHEN IT WAS SENT IN THE MAIL.”

How do we know this? Because the statute says so. End of discussion. Why can’t we continue arguing about it or questioning it? because the Supreme Court said so. The discussion is over.

The bank is required to comply with the TILA rescission within 20 days. And as Justice Scalia said, the statute is clear on its face and therefore NOT subject to a judge’s interpretation of it. So the point is that the rescission has already happened the moment the borrower drops it in the mail.

If the bank feels aggrieved by the rescission they must petition a court for relief — to get the court to agree that the suing party has standing and that they have meritorious CLAIMS (not defenses). Their action must specify why they should not be obligated to comply with the TILA rescission statute. But there are no grounds specified in the statute that state or even imply that if the banks raise issues about whether the rescission was proper, they could be relieved for that reason. And the bank (or its successor) can only do that within 20 days from the date the notice was mailed. The reason for the 20 days is that Congress specifically wanted to deprive the banks of any opportunity of trapping the borrower into an unwanted loan deal.

The statute does not allow for any stonewalling by the banks. How do we know? — because it isn’t there in the statute. If your question relates to “why couldn’t the bank…”[fill in the blank] the answer is “because it isn’t in the clear unambiguous statute.”

Congress gave the banks 20 days in which to comply. After that, they are in violation of the statute. They have blown the time to comply. So IF they want to bring a lawsuit, they MUST file within 20 days while the clock is still ticking on when compliance with TILA rescission is due. Any other interpretation would negate the 20 day compliance requirement (improper “interpretation” of the statute).

Think about it. If the banks could bring their claims as defenses, then the rescission would never be truly effective until a Judge said so —exactly the opposite of what the statute says, exactly contrary to the Supreme Court ruling on exactly that subject and exactly in violation of the Federal Reserve (REG Z).

Many of you are searching for something in the statute that not only isn’t there, it also doesn’t belong there considering the goal of the statute. Any attempt to read something “extra” or contingent into the statute is clearly unauthorized after the Jesinoski decision.

In the lawsuit filed by the bank (or successor) they can raise the issues that so many people are calling “defenses” but the entire burden is on them to prove (a) JURISDICTION: standing without the void note and mortgage and (b) whatever grounds they want to assert that they should be relieved from their obligation to comply with the statute. There is nothing contingent about the rescission.

When the Notice of Rescission is dropped in the mail it is done and has the same effect as a Judge entering a court order and having the court order made a part of a court record. But the statute removes the requirement that the rescission be made a part of any court record, and removes any possibility that the borrower would need to sue to GET a rescission. This is the part that most lawyers and borrowers are still not comprehending probably because they can’t believe it would be that easy.

This is not to say that there won’t be litigation after rescission as banks attempt to wriggle out of this perfectly clear statute that is “unambiguous” according to a unanimous US Supreme Court. The effect of this statue means that all disclosures to all investors were wrong, possibly fraudulent and certainly incomplete.

The banks will try everything they can think of because in most cases they cannot file (lack of standing) the lawsuit seeking to get relief from the TILA statutes requiring their compliance with TILA rescission, to wit: (a) return of the canceled promissory note, (b) filing papers to release the property from any lien or encumbrance or mortgage or deed of trust related to the subject loan and (c) paying the borrower all interest principal and fees ever paid to anyone on this loan.

It is the anticipation of further legal action — like when the borrower goes to court saying “You can’t foreclose on me because your mortgage and note are void” that we offer the rescission package. The banks will try to raise the “defenses” that everyone is talking about. The smart lawyer won’t get pulled into that controversy. The issue is whether the rescission was mailed. If so, it was effective and is effective from that moment on.

And THAT is why our help is needed to provide local counsel with the strategies and tactics to combat the futile attempts of the bank to raise issues that they waived by not filing within the 20 days. The best example is the the Jesinoski decision itself. But there are many other cases that have started up. Most of them are getting settled on very favorable terms to the borrower but many are headed for an actual decision. With the Jesinoski decision only being final this past February, there hasn’t been enough time for these cases to wind their way all the way through the court systems.

In view of the Jesinoski decision, it is probably a stronger argument to say that NO action is permitted after the rescission notice has been sent, than to say that the banks can raise “defenses” at any time — clearly against the express wording of the statute as drafted and passed by the US Congress. To say that the banks could raise these as defenses to rescission at any time would mean that the rescission is somehow contingent upon a ruling of a court. THAT is clearly and expressly (read Scalia’s opinion) off the table thanks to the TILA Statute, the Supreme Court and the Federal Reserve (REG Z).

PRACTICE HINT FOR LAWYERS: Be careful in researching this because all decisions before Jesinoski are explicitly wrong. For the lawyer casually researching the matter it will appear as though the greater weight of the law is clearly in favor of the banks. Nothing could be further from the truth. The deck is now stacked in favor of borrowers.

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