Understanding Jesinoski and TILA Rescission

Dear ReadTheCases:

I understand your authoring comments from a pseudonym because the outcome of your messages embarrasses you so. Here’s a case in point.  You have misconstrued the SCOTUS Jesinoski opinion as allowing a TILA rescission without a preceding TILA violation. I have pointed out that the Jesinoski trial court ruled against Jesinoskis and denied Jesinoskis their requested TILA resscission and damages because no TILA violation occurred to trigger the right to rescind. But you have repeatedly stuck to your wrongful thinking by claiming that the trial court was wrong.  You think Jesinoskis had the right to rescind without any TILA violation.

Your interpretation of TILA rescission would allow a borrower to put a creditor to an enormous amount of trouble and expense and then force rescission for no reason whatsoever.

Government would not create or enforce a law allowing a borrower to impair the obligations of a contract through unjust rescission because such a law would violate the US and state constitutions.

Florida Constitution Article I, Declaration of Rights, typical of state Constitutions:

SECTION 10. Prohibited laws.—No bill of attainder, ex post facto law or law impairing the obligation of contracts shall be passed.

Article I of the US Constitution contains a similar provision:

Section. 10. No State shall enter into any Treaty, Alliance, or Confederation; grant Letters of Marque and Reprisal; coin Money; emit Bills of Credit; make any Thing but gold and silver Coin a Tender in Payment of Debts; pass any Bill of Attainder, ex post facto Law, or Law impairing the Obligation of Contracts, or grant any Title of Nobility.

You might want to read the Wikipedia article about rescission.

A borrower has two rights to rescind under TILA:

  1. 3-day absolute;
  2. 3-year conditional.

We’re talking about the conditional version.

A failure to give disclosures in a purchase money loan does not justify TILA rescission because TILA rescission does not apply to those loans. Purchase Money Loan = no conditional TILA rescission.

So that proves that circumstances must be right (HELOC or Refi) to “open the gate”to TILA rescission. That means a borrower cannot invoke conditional TILA rescission if the gate is closed (purchase money loan). No HELOC/Refi = no conditional TILA rescission.

Well, there’s another gate to conditional rescission: the loan must have been consummated (TILA rescission is, after all, a CONTRACT REMEDY, so a contract must exist before a party can rescind it). No consummation = no conditional TILA rescission.

Here’s yet another gate to conditional rescission: the borrower must not have sold or transferred the property. Property sold or transferred = no conditional TILA rescission.

And, there’s yet another gate (condition) to conditional TILA rescission: a TILA VIOLATION must have occurred. EVEN IF all those other gates are open, the borrower cannot force conditional TILA rescission if NO TILA VIOLATION occurred. So, NO TILA VIOLATION = NO conditional TILA RESCISSION

I explained this to you and showed you the regulation a couple of days ago:

12 C.F.R. §1026.23 “… If the required notice or material disclosures are not delivered, the right to rescind shall expire 3 years after consummation, upon transfer of all of the consumer’s interest in the property, or upon sale of the property, whichever occurs first. ”

As you can see from the explanation of Regulation Z above, the right to rescind extends beyond 3 days ONLY IF the required notice or material disclosures are not delivered.

Fail to deliver required disclosures is a TILA VIOLATION, and that triggers the right to rescind beyond 3 days after consummation. Thus, after 3 days, NO TILA VIOLATION = NO RESCISSION.

Moreover, NUMEROUS courts across the land before and since Jesinoski have endorsed the above principal: no TILA violation = no conditional TILA rescission.

Yes, a borrower can in the absence of a TILA violation wrongfully send a notice of rescission (as Jesinoskis did), or SUE to enforce the rescission (as Jesinoskis did). But, such a suitor will get no rescission and no damages (as happened to Jesinoskis).

Read through those opinions I listed below for you. You’ll see that the courts support my explanation of how TILA rescission operates, and that people lose who buck against the law and common sense.

Try to remember that, other than for an unconditional TILA 3-day right to cancel, Rescission is ALWAYS a REMEDY for a violation of an actual contract or related law. If no contract exists, or if the creditor does not breach the contract or related law, then no contract remedy applies.

Bob Hurt

On 2018-01-25 17:34, Readthecases wrote:

And that list of cases you posted (thank you for that) are dwarfed by the amount of cases that, over the period of decades, explicitly or implicitly held or presumed that a borrower cannot unilaterally rescind under TILA by simply mailing a letter.

They were wrong.

The Jesinoski SCOTUS opinion laid them in the trash bin.  For DECADES most of the federal judiciary was wrong on the fact that a homeowner can rescind his loan pursuant to TILA – and that’s despite the plain wording of the statute unequivocally stating so.

I haven’t read all those cases you listed here.  Some may have ended well for the lender because the borrower litigated the case poorly, like Jesinoski did – if there’s a way a court can use such mistakes to make a homeowner lose – it will.  Perhaps others were litigated well and should have been won by the borrowers, but the courts wanted the borrowers to lose anyway, so they lost.

In any event, as I said, the number of those cases you posted is absolutely dwarfed by the the decades of bad decisions by courts who couldn’t read the plain wording of a simple statute and had to be corrected by SCOTUS.

If that is true, such cases do not invalidate what I’ve been saying:  you sue for a declaration of rights that the forecloser has no standing to foreclose because the deed of trust it relies upon no longer has legal effect as a matter of law due to the borrower’s TILA rescission.

At that point, the lender can only properly defend by saying the borrower did not mail a rescission notice or it didn’t give the lender proper notice.  Whether the borrower actually had grounds for the rescission is at that point not relevant to the proceeding.  All that is relevant is whether or not the notice was sufficient on its face and whether or not it was mailed to the originator on the note.

Not that the lender doesn’t have a remedy.  It can attack the declaratory judgment collaterally by pleading extrinsic fraud.

Sent from Outlook

From: Maven <maven@mortgageattack.com>
Sent: Wednesday, January 24, 2018 12:17 PM
To: ReadTheCases@outlook.com
Subject: Regarding your comments at my mortgage attack blog

Dear ReadThe Cases:

You made this comment on my blog:

So SCOTUS states Jesinoski's rescission was effective upon mailing and you think the lower court's opinion (who already had to corrected once by SCOTUS) invalidates the SCOTUS opinion.

You do know that SCOTUS is the highest court in the land, don't you Bob?

My answer:

The Trial court heeded the SCOTUS opinion.  Read the Post-Jesinoski opinions below to see how the courts disagree with Garfield (and you, apparently).

Remember the nature of the dispute.  Jesinoskis had mailed his notice of rescission exactly 3 years after loan consummation, but the district and circuit denied the rescission because Jesinoskis sued AFTER mailing the notice.  So the only issue before the SCOTUS was the question of whether Jesinoskis had to sue within the three year period of repose. SCOTUS said no because TILA does not require that.

The sole principle that Jesinoski clarified was that the three year limitation on notice did not extend to the filing of a lawsuit. 135 S.Ct. at 793

Brown v. Gorman, Dist. Court, ED Virginia 2016

Post-Jesinoski Opinions

Courts across the land rendered these opinions AFTER the US Supreme Court rendered the Jesinoski opinion about TILA rescission in January 2015. Most of these opinions debunk the utter nonsense that attorney Neil Garfield propounds on his LivingLies blog about TILA rescission. Sadly, most of these borrowers seem to have heeded Garfield’s false legal theories instead of pursuing the mortgage attack method.  That explains why those borrowers lost.

Published by

Bob Hurt

See http://bobhurt.com Consumer advocate helping borrowers in foreclosure save their homes and obtain compensation for their injuries.

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