Garfield and Sickler in deep confusion over TILA Right to Rescind

Neil Garfield recently posted this:

Hat tip to Carol Molloy, Esq. in Tennessee in bringing this article to my attention. I think that the author, Alexandra P. Everhart Sickler associate Professor of Law at North Dakota School of Law, has done an excellent job in analyzing the legal precedent, the statutory provisions, the agency rules, and the general attitude of the Courts that seek to restrict the effect of TILA Rescission. Published by Rutgers Journal of Law and Public Policy, this is the best of what I have read thus far. I see many parts that could be quoted in briefs and memorandums of law.


It looks like Garfield has finally found a fellow BOZO who cannot grok TILA rescission, and writes nonsense about it in a law journal. With opinions like hers, Sickler will never become a full professor. She clearly cannot read and comprehend either the law nor the SCOTUS opinion in Jesionski nor the myriad circuit opinions explaining the unwinding process of rescission in patient detail.

I don’t agree with Sickler’s obvious misunderstanding that “The Supreme Court ruled against the federal circuits’ majority-held view, holding that the statute does not require the filing of a lawsuit… That view holds that TILA implicitly requires a consumer borrower to file a lawsuit to exercise her right to rescind even though the statute expressly provides that written notice is sufficient. Five circuits imposed this requirement even though Congress did not, … ”

The SCOTUS in Jesinoski mentioned in its holding the unwinding process which the law requires, but Sickler, no stickler for reality, ignores it. The statute implies the unwinding and the Reg Z SPELLS OUT unwinding through mutual tender, and BOTH statute and reg explain that the court can modify the process of rescission.

Common sense tells us that a creditor has no obligation to accept the borrower’s rescission as some kind of command that applies regardless of whether the lender failed to give the borrower proper disclosures of the right to cancel and rescind, or if the borrower sent notice of rescission styled as some malformed indecipherable curiosity
instead of a proper notice, or whether the borrower sent the notice after the 3-year window had closed. That reasoning makes it obvious that only a court should determine the matter,

Thus a “RIGHT” to rescind begins with a failure of the lender to give the borrowers sufficient disclosures of the right to cancel the loan within 3 days, and the right to rescind it within 3 years. If the lender actually gave sufficient disclosure, then the “RIGHT” never accrues to the borrower, and the borrower might have the right to rescind under the common law, but has no such right under TILA.

In my humble opinion, only a bozo cannot comprehend the common sense that rescission differs from cancellation, and the ACCRUAL OF RIGHT TO RESCIND (through lender failure to give proper disclosures of the right), not written notice of rescission, ENABLES the START of the rescission process.  Then, if and only if a valid causes exists, the borrower initiates rescission by sending notice of rescission to the lender. If the creditor doesn’t agree, the creditor may with impunity ignore or deny the wrongful notice of rescission. Exactly such denials happen all over the USA, and borrowers have no choice but to sue or sleep on their rights. And when borrowers sue, the court determines the reality of the TILA violation, the sufficiency of notice of rescission, and the ability of the parties to tender. Then, IF and ONLY IF ALL of those determinations justify it, the court will order the rescission.

The Jesinoski opinion did NOTHING to change the TILA rescission unwinding process. Yes, rescission starts with mailing of notice, but the parties COMPLETE i ONLY by fulfillment of all the conditions the law and regulation require, which, incidentally, I mentioned above.

A plethora of post-Jesinoski opinions fully corroborate the unwinding requirement. Furthermore, USCCA TILA rescission opinions in Circuits 2, 3, 4, 5, 7, and 11 constitute stare decisis because the SCOTUS in Jesinoski did not overturn their opinions, for they had already supported rescission lawsuits after the 3-year notice of rescission limitation. However, ALL of the circuits had already supported the 1-year-and-20-days limit on the borrower’s right to sue to enforce the rescission following notice. Let us not forget that Jesinoski dealt only with the question of whether borrower may sue later than 3 years after loan consummation. The SCOTUS said yes, and now Jesinoski fights the issue of rescission back in trial court. I have predicted the rescission will not happen because he cannot tender.

Sickler seeks to inquire about federal circuit hostility to TILA rescission. She need look no further than to the common sense reality that the borrower MUST have accrued the right, then must give proper notice, and then must tender after the lender tenders, and if the lender denies the rescission, the borrower MUST SUE the lender under 15 USC 1640, or include rescission as an affirmative defense in a foreclosure proceeding or related action.

That explains how TILA rescission works, and Sickler clearly doesn’t grok it.

15 USC § 1565
12 CFR § 1026.23
Jesinoski v. Countrywide Home Loans, Inc.
135 S. Ct. 790, 190 L. Ed. 2d 650, 574 US __ – Supreme Court, 2015


The Shelton case shows EXACTLY why the courts feel so hostile toward borrowers who try to shake down lenders and get a free house or rescission money for nonsensical reasons.

American Mortg. Network, Inc. v. Shelton, 486 F. 3d 815 – Court of Appeals, 4th Circuit 2007

********** My Overview of the Issue

Real Estate Appraiser Shelton overvalued the property in an appraisal he oversaw, took out a loan for more than he could afford, and timely sent the lender notice of rescission because of understated loan cost. The lender agreed to unwind if Shelton would agree to tender, but Shelton responded that he could not tender. Instead Shelton suggested a deed in lieu of tender if the lender would pay the difference between the loan balance and the exorbitant appraised value. The lender refused because of the inflated appraisal. Shelton claimed the bank forfeited the loan proceeds by refusing to remove the lien within 20 days of cancellation.

The lender sued , seeking declaratory judgment that it had processed Shelton’s TILA rescission effort correctly (denying rescission). The trial court sided with the lender and denied rescission, and the 4th USCCA affirmed.

I have appended excerpts of the opinion. They show that scammer Shelton committed loan application fraud (felony), appraisal fraud (felony), and numerous other shenanigans.

************* From the opinion (SCAMMERS HEED THIS)

First, it appeared to the trial court that Shelton significantly overstated his income in the initial loan application submitted on his behalf by Waterford Financial Services, 819*819 Inc. (“Waterford Financial”). The application stated that Shelton’s annual income in 2004 was $97,200. Subsequent examination of Shelton’s 2004 tax return revealed an income of $34,236. According to Amnet, if Shelton’s application had disclosed his actual 2004 net income, he would not have qualified for the loan.

Second, the Uniform Residential Appraisal Report received from Waterford Financial and purportedly prepared by an independent appraiser was in fact prepared by an appraiser operating under Shelton’s supervision. Although the appraiser was technically an independent contractor, he had been trained by Shelton and worked exclusively for Shelton’s company. The report estimated the fair market value of the house as of November 15, 2004, to be $370,000. Amnet contends that the appraisal was inflated and that a “truly independent” appraiser assessed its fair market value at closer to $300,000. Irrespective of the numbers, it appeared to be uncontroverted that the Sheltons’ appraiser was not independent.

Third, despite signing an Occupancy Agreement at closing, representing that he intended to occupy the house as his primary residence throughout the twelve-month period immediately following the loan closing, Shelton was in fact in the process of building another home that would serve as his primary residence. The Sheltons could not afford to finance the custom home and continue payments on the Amnet loan.

The Sheltons argue that the above-described alleged misrepresentations, which were found by the district court to constitute inequitable conduct, were material facts “hotly in dispute.” The Sheltons maintain that the resolution of these factual disputes was critical to the issues of rescission and forfeiture. In their view, the trial court erred by refusing to conduct an evidentiary hearing to address these disputed facts. We disagree.

Despite the Sheltons’ protestation, many of the facts underlying the inequitable conduct were uncontroverted. For example, Shelton’s 2004 tax return reflected income far below that represented to Amnet. There is also no dispute that the appraiser who conducted the appraisal on the property was affiliated with Shelton and operated under his supervision. Although we do not believe that Shelton’s inequitable conduct necessarily controlled the outcome of this case, it was appropriately considered by the trial judge.[3] As the United States Court of Appeals for the District of Columbia noted in Brown v. National Permanent Federal Savings & Loan Ass’n, 683 F.2d 444 (1982), “[a]lthough the right to rescind is [statutory], it remains an equitable doctrine subject to equitable considerations.”[4] Id. at 447.

Specifically, the Sheltons allege that pertinent portions of the Notice of Right to Cancel were obstructed by removable “Sign Here” stickers. They assert that the stickers obscured the cancellation signature blocks and the language indicating where to sign in order to rescind the transaction. It is, however, interesting to note that the Sheltons executed the cancellation documents almost immediately upon receipt and returned them to Amnet in a timely manner. The Sheltons also complain that they received only one copy of the new Notice of Right to Cancel as opposed to the four copies they argue are required by statute—two for each of the Sheltons. See 12 C.F.R. § 226.23(b) (“[A] creditor shall deliver two copies of the notice of the right to rescind to each consumer entitled to rescind.”)

Although this Court believes that Amnet substantially complied with all requirements of TILA in notifying the Sheltons of their right of rescission, this Court need not address each alleged hyper-technical violation. Here, Amnet had no obligation under TILA to provide a renewed notice of right of rescission or to reopen the cancellation 822*822 period. This obligation is only triggered under TILA when the financial discrepancy is over $100. See 15 U.S.C. § 1605(f)(1)(A); 12 C.F.R. § 226.18(d)(1)(i). The notice provided to the Sheltons in this case was strictly voluntary and therefore needed not meet the technical requirements of 12 C.F.R. § 226.23(b).

Published by

Bob Hurt

See Consumer advocate helping borrowers in foreclosure save their homes and obtain compensation for their injuries.

2 thoughts on “Garfield and Sickler in deep confusion over TILA Right to Rescind”

  1. As they say, the proof is in the pudding. I would very much like to see all the TILA cases Alexandra P. Everhart Sickler, associate Professor of Law at North Dakota School of Law, has handled so far. Even more so, I’d be extremely interested in reading those… she won, particularly WITHOUT a lawsuit. Ever. Pre or post Jesinowski makes no difference: apparently, she is a TILA expert, worthy of being quoted and followed.

    Does she handle cases? Does she try anything? Nope. Not from what my research has yielded.

    So, we’re back to the crux of TILA. Just a show of hands please: who, since Jesinowski, has asserted a valid TILA claim by just sending one letter of rescission? And who prevailed just on the basis of said letter? I understand all about gag orders and confidentiality agreements but… there’s got to be SOMEONE out there who tested it and can vouch for it. No…? ‘Cuz we know Garfield hasn’t. And nor has anyone of his cult followers.


  2. Bob,

    Agree with you fully on this.

    Also, Sickler really steps in it when she tries to find “motivations” for Courts ruling as they do. She essentially alleges that it is to both lighten the Court dockets, and a bias against homeowners. What she does not consider is that TILA has been around for decades and these same issues were litigated long before the crisis.

    No wonder that NG would post this crap on his website to support his own flawed arguments.


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