Final Jesinoski Opinion Proves Garfield Wrong

Neil Garfield has repeatedly asserted on his blog that all a borrower needs to do is send a rescission notice to the creditor in order to effectuate a rescission, whether or not a TILA violation occurred.  And he has tried to con ignorant borrowers into paying $3000 for his useless “TILA RESCISSION PACKAGE” of related legalistic puffery.

Here’s proof that Garfield’s theory of TILA rescission, and of the SCOTUS Jesinoski opinion, is plain wrong.

In 2018 the Jesinoskis appealed the District Court ruling against them, and the 8th Circuirt Court of Appeals held this:

On remand, the district court[1] granted summary judgment, concluding the signed acknowledgment created a rebuttable presumption that the Jesinoskis had received the required number of copies. The court also concluded the Jesinoskis failed to generate a triable question of fact rebutting the presumption. We affirm.

JESINOSKI v. Countrywide Home Loans, Inc., 883 F. 3d 1010 – Court of Appeals, 8th Circuit 2018

You can interpret this to mean that a TILA violation is a condition precedent to TILA rescission. No violation = NO RESCISSION.

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Mortgage Fraud Examiners has been warning homeowners for years that contractually they must send a “grievance” letter to their bank/servicer of any wrongdoing within their contract before filing a lawsuit, or they’ll get booted out of court. The bank’s are beginning to catch on:

Neil Garfield (the Pot) Warns (Calls) Consumers (the Kettle) about Crooked Lawyers (BLACK?)

Attorney Neil Garfield, ever concerned about public exposure to crooked or incompetent attorneys like himself, writes to readers of his Living Lies blog:

Warning: Conduct your Due Diligence on ANY Attorney you Hire

by Neil Garfield Before you hire ANY attorney for a phone consultation, to conduct an analysis of your case, or retain them to represent you, please conduct your due diligence first. A simple google search with their name will usually suffice.

In fact, before you hire Neil Garfield for a consultation, case analysis, or other legal matter I suggest you conduct your due-diligence like you would when hiring any professional.

Always use caution if the Bar has publicly reprimanded an attorney.

If you believe you have been a victim of an unethical Florida foreclosure attorney, please report your experience to the Florida Bar at:

Contact me at:

Neil Garfield | March 27, 2018 at 2:54 pm

In the same spirit of consumer advocacy, I decided to help Neil Garfield spread the word about crooked lawyers, in this case Neil himself, if you believe the Florida Supreme Court. Here’s a little information on Neil:


Supreme Court disciplines 32 attorneys

The Florida Supreme Court disciplined 32 attorneys — disbarring six, revoking the licenses of two, suspending 16 and publicly reprimanding eight.

Two attorneys were also placed on probation and another was ordered to pay restitution.

The attorneys are: […]

  • Neil Franklin Garfield, Parkland, to be publicly reprimanded. (Admitted to practice: 1977) In at least four instances, Garfield accepted money to represent clients and failed to follow through. In one case, Garfield did not perform the work and, when asked for a refund, denied knowing the client. In other cases, he failed to communicate, charged excessive fees, failed to return refunds upon request and failed to timely respond to Bar inquiries.

Frivolous Filings and Bogus Legal Theories

Neil Garfield’s frivolous filings and bogus legal theories have already cost at least one client, Zdislaw Maslanka, a wad of attorney fees in an utterly frivolous action to get his house free even though he remained current in his mortgage payments. As the docket entries below show, the Florida 4th District appellate panel affirmed the 17th Circuit’s dismissal of the case and ordered Maslanka to pay the attorney fees of the two mortgage creditors that he sued.

  • 4D14-3015-Zdzislaw E. Maslanka v. Wells Fargo Home Mortgage and Embrace Home Loans
05/12/2016 Affirmed ­ Per Curiam Affirmed
05/12/2016 Order Granting Attorney Fees­ Unconditionally ORDERED that the appellee Embrace Home Loans Inc.’s September 2, 2015 motion for attorney’s fees is granted. On remand, the trial court shall set the amount of the attorney’s fees to be awarded for this appellate case. If a motion for rehearing is filed in this court, then services rendered in connection with the filing of the motion, including, but not limited to, preparation of a responsive pleading, shall be taken into account in computing the amount of the fee
05/12/2016 Order Granting Attorney Fees­ Unconditionally ORDERED that the appellee Wells Fargo Home Mortgage’s September 3, 2015 motion for attorneys’ fees is granted. On remand, the trial court shall set the amount of the attorneys’ fees to be awarded for this appellate case. If a motion for rehearing is filed in this court, then services rendered in connection with the filing of the motion, including, but not limited to, preparation of a responsive pleading, shall be taken into account in computing the amount of the fee.

Misleading A Consumer about the Law

Last but not least, below see the text of an 8-page report that Neil Garfield charged Vincent Newman THOUSANDS of dollars for, advising a foreclosure defense and TILA rescission strategy. Newman obtained a pick-a-pay loan in 2010 to purchase a home, then defaulted. Garfield idiotically suggested mailing a notice of TILA rescission in 2016, and then suing to enforce it, without regard to the fact that the TILA statute of repose of 3 years for conditional rescission had already expired, and the creditor had not violated TILA. Garfield thereby illustrated his delusional misunderstanding of conditional TILA rescission which the law allows only for non-purchase-money loans like refinances and HELOCS in which the creditor failed to give the borrower required disclosures of the right to cancel and the cost of the loan not more than $35 understated. No such TILA violation occurred in Newman’s case. Thus, Neil Garfield’s incompetent advice, had Newman heeded it, would have caused Newman expense and embarrassment through a frivolous, failing TILA rescission effort.

———————  Garfield’s Expensive Report to Newman —————–

This is a review and report and not a definitive statement of opinion on the entire case strategy.
Since the property is located in Florida and Mr. Garfield is licensed in Florida, he is qualified to
give both expert opinions and legal opinions.

TO: File
DATE: February 8, 2016
RE: Vincent Newman and his Wife
Phone No.: 954-554-6487
Email Address:


1. The address of the property in question is 6401 Garfield Street, Hollywood, Florida, 33024 in Broward County.

2. The property is in foreclosure. As of December 29, 2015 Mr. Newman reports that he hired an attorney, started modification and is not current on payments.

3. He has requested a review and commentary in connection with his property and his loan.

4. He has already filed a petition for relief in bankruptcy court under Chapter 7 and apparently converted to Chapter 13. Motion to lift stay was filed and presumably granted. The name of his attorney in the State Court action, Case No. CACE10041220 is Evan Plotka, in the 17 th Judicial Circuit for Broward County [Florida].

5. Mr. Newman reports that in 2010 they were 3 months behind in their payments. Acting through a HUD counselor there was apparently an agreement that was reached in September 2010 where they would catch up on the three payments. According to Mr. Newman Wells Fargo broke the agreement, refused to discuss the matter any further and Mr. Newman and his wife apparently were served with a summons and compliant that October 2010. If they have correspondence proving the existence of the deal, then this would be a point to raise in defense as a possible violation of either estoppel 1 or dual tracking, which was not passed until after the agreement.

1 If the agreement can be proven (they will most likely deny it), then even without the Dodd-Frank prohibition against dual tracking, the homeowners reasonably relied upon the existence of the agreement and made payments that were accepted. Wells Fargo has a history of accepting payments under oral modifications and then abandoning the agreement without accounting for the payments — which often makes the default letter wrong as to the missing payments.

6. Disclosures as to the true funding of the origination of the loan, the acquisition of the debt (as opposed to the acquisition of the paper) and the true party in interest who could be plaintiff are all absent, which is the same thing that I have seen as an expert witness and as an attorney many times with Wells Fargo. Many entities, like World Savings and Wachovia boasted they were funding their own loans. This was nearly never true. The loan papers may have been originated back in 2010 but the disclosure of the money trail has never been made.

7. Mr. Newman answered the summons and complaint without the help of legal counsel and served interrogatories on the plaintiff that he says were never answered.

8. He has apparently been through several attorneys that were merely kicking the can down the road to buy more time without making mortgage payments but of course having Mr. Newman make monthly payments to the attorney.

9. According to the registration statement submitted by Mr. Newman the original loan was with World Savings Mortgage which merged into Wachovia and then Wells Fargo. I think what he meant was World Savings Bank which was acquired by Wachovia Bank which in turn was acquired by Wells Fargo Bank. The case was filed as Wells Fargo Bank as plaintiff. From prior experience we know that this is probably a ruse intended to cover up the fact that they don’t know who the creditor is and they are hoping that a judge will simply take their word for it.

10. Mr. Newman has provided a docket from the Clerk of the Circuit Court which indicates that the property has been set for sale several times. This would indicate in turn that a final judgment of foreclosure was entered. However I do not see on the docket the description of an order granting summary judgment or a final judgment of foreclosure entered in favor of Wells Fargo. I presume that such a judgment exists or the sale would never have been scheduled.

11. As of December 30, 2015 Wells Fargo is showing a balance due of $93,979.25, with an unpaid principle balance of $200,338.10, an escrow balance of $31,855.05, carrying an interest rate of 6.5 percent with a maturity date in July 2049.

12. Based upon my knowledge of the parties involved, and specifically in this case Loan No. 0483028569 2 , I believe that the loan is in fact claimed by a trust which in fact does not own it. The loan was in my opinion most likely never funded by World Savings Bank, Wachovia or Wells Fargo. It is my opinion that none of those entities paid for either the origination or the acquisition of the loan and that any documents to the contrary are fabricated and most likely forged. The system at Wells Fargo if this case actually goes to trial at some point will show that probably Fanny Mae or Freddie Mac was the “investor” from the start. However, since the government sponsored entities generally function in only two areas 3 , it seems unlikely, to say the least, that the investor would be correctly identified in the Wells Fargo system that they would use at trial unless they have changed their method of fabricating business records.

2 Client advises that the loan number changed recently. The reasons for this change should be investigated.

3 The statutory authority of the GSE’s (Fannie and Freddie) allow for them to operate as guarantors and/or Master Trustees of REMIC Trusts who were intended to own the debt, note and mortgage. The “hidden” REMIC Trusts operate the same as private label and publicly registered REMIC Trusts. And they suffer from the same defects — the money from investors never made it into any account owned by the Trust or the Trustee, which means that the Trust could not possibly have paid for loans. The Trust would be an inactive trust devoid of any business, operations, assets, liabilities, income or expenses.

13. For reasons that I will discuss below, it is my opinion that the homeowners in this case should send a notice of rescission and we will discuss whether that notice should be recorded. In addition there should be consideration of a federal lawsuit seeking to enforce the rescission and seeking an injunction to prevent Wells Fargo from using the note and mortgage against the Newmans. I would further add that in my opinion from my review of the documents that were provided by the client there is a strong likelihood of success using standard foreclosure defense strategies.

14. In the court file is a notice of action which states that Vincent Newman and Imelda Newman both stated as avoiding service at the address of 6401 Garfield Street, Hollywood, Florida, 33024. This indicates to me that the service in 2010 was a “drive by” service in which no real effort was made to find or serve Mr. or Mrs. Newman.

15. This in turn leads me to believe that this was typical foreclosure mill actions and that Wells Fargo still has not fulfilled its obligation to review the business records to determine the ownership or balance of the loan. Or to put it differently, they probably did know about the problems with ownership and balance of the loan and wanted the foreclosure sale anyway. Based upon my preliminary review it would appear that Wells Fargo Bank made payments to the certificate holders of a trust under a category known mainly in the industry as “servicer advances.”

16. Based upon their statement I would say that their servicer advances totaled more than $90,000.00. The longer the case goes the higher is the value of their claim to recover their “servicer advances.” However, those advances, while made, came from a comingled account consisting entirely of investor money. Therefore there is no actual action for recovery of the servicer advances.

17. The case was apparently filed in January 2011. Or if the case was not filed at that time then additional paperwork was added to the file at that point. Since the case number refers to the year 2010 I am presuming that they filed a skeleton case in order to have the case filed before the end of the year.

18. The complaint is interesting in that, as usual, Wells Fargo does not allege that it is the owner of the debt. It alleges that it is the owner and holder of the note and mortgage. And of course it alleges that a default exists but it does not state the party to whom the money is owed nor the statement of ultimate facts upon which the court could arrive at the conclusion that the actual creditor has suffered a default or loss as a result of the payments being stopped.

19. The alleged loan, which in my opinion was never funded by World Savings Bank, was a reverse amortization (pick a payment) loan. This loan was probably sold in one form or another 20 or 30 times. The capital from the sale of the loans probably funded many other loans.

20. There is a request filed in January 2011 for the original promissory note, and the contact information for the current holder of the note, which was never answered. This might have some relevancy to a claim contesting jurisdiction of the court.

21. While the docket that was sent to me by Mr. Newman did not appear to contain the final judgment for the plaintiff, the documents that he sent and which were uploaded contain a final judgment for plaintiff. The final judgment apparently was a summary judgment in favor of the plaintiff on November 17, 2011 at 1:30 p.m.

22. As expected, the documents in the possession of Mr. Newman contain a mortgage servicing transfer disclosure. Hence we have evidence of the transfer of servicing rights but not transfer of ownership of the debt. 4 In my opinion this corroborates my conclusion that the loan was subject to claims of securitization starting at a time before consummation could have ever occurred. In my opinion the loan was table funded, which means that the actual source of funds for the loan was another party to whom the documents would be “assigned” immediately after, or even before the apparent “closing.”

4 This is especially relevant to the issue of whether the alleged loan is subject to claims (probably false claims) of securitization. Each of the alleged entities in the “Chain” had robust servicing capacities. The transfers of servicing duties makes no sense and explains nothing except that the usual pattern of musical chairs was being employed to confuse the issues surrounding “holder” of the note etc. The presumptions that are ordinarily used for a holder of a note should not be allowed, in my opinion, because of the history of flagrant violations by Wells Fargo and its predecessors. Producing evidence of a pattern of conduct of fabrication, forgery, robo-signing etc should enable the attorney to argue that the presumptions should not apply, thus requiring Wells Fargo to prove the money trial and ownership of the debt, which they will never do.

23. In my opinion the mortgage document was improper in that it failed to disclose a hidden balloon payment. By having negative amortization or reverse amortization, the balance that is owed as principal continues to increase. Under the terms of the mortgage when it reaches 115 percent of the original loan principal, the loan automatically reverts to standard amortization which is what caused so many people, including the Newmans, to default. Borrowers were seduced into taking these highly complex loan products under the supposition that they would later be able to refinance again, taking “equity” out of the home and providing them with the resources to make the payments. The effect of these loans is to cause a balloon payment at the end of a short period of time. Thus the balloon was not disclosed and the term of the loan was not disclosed because the full amortization of the loan was beyond the financial capacity of the “borrower.”

24. In my opinion the assertion by Wells Fargo that it is the investor, the creditor, the lender, or the successor lender is and always has been false. It appears that no sale of the property has taken place and that none is scheduled based upon information I received from Mr. Newman on December 29, 2015 in a telephone consultation. Even though a judgment has been entered, it is my opinion that the rights and obligations of the parties are still defined by the alleged note and the alleged mortgage. Hence the sending of a notice of rescission and the recording of a notice of interest in real property under Florida Statute 712.05 would be appropriate as a strategy. I also think that an action filed in federal court to enjoin Wells Fargo from the use of the note and mortgage would be appropriate. The basis for the action would be, after notice of rescission had been sent, and presumably after the 20 days from receipt of the notice of rescission had expired, the loan contract was cancelled, the note and mortgage became void as of the date of mailing of the notice of rescission.

25. There is also another strategy of alleging a fraud upon the court, but I don’t think that would get much traction.

26. What I think can get some traction is a lawsuit against Wells Fargo for having presented the false evidence to the court. The difference is that you are not accusing the court of wrongdoing, you are accusing Wells Fargo of wrongdoing and taking advantages. I believe that considering the history that the Newmans report in their narrative that substantial compensatory damages might be awarded, but that punitive damages do not appear to be likely at this time. That is not to say that punitive damages will not be awarded. As time goes on, more and more courts are becoming aware of the fact that the type of foreclosure system has been a sham. Each time another judgment for settlement is reached it becomes apparent that the banks are continuing to engage in the same behavior and simply paying fines for it as a cost of doing business.

27. As Mr. Newman knows, I do not accept many engagements to directly represent homeowners in these actions. I think that in this case I would be willing to accept the engagement, along with co-counsel, Patrick Giunta. I would have to review this file with him to confirm, but the likelihood is that the initial retainer would be in excess of $5,000.00 and that the monthly payment of our fee would be at least $2,000.00. There would also be court costs and other expenses amounting to over $1,000.00.

28. Another option is to seek out another attorney who is willing to take on the case and use my services as litigation support. The hourly rate I charge for all matters, whether as attorney or expert witness is $650.00. The hourly rate of most other attorneys is significantly below that. The actual amount of work required from me if I am in the position of litigation support would be vastly reduced and thus the expense of having me work on the Newman file would be significantly reduced, enabling the Newmans to hire counsel who is receptive to me providing litigation support.

29. In all engagements, in which I am the attorney, or providing litigation support, there is also a contingency fee that varies from 20 percent to 35 percent of any amount paid in hand to the homeowner. Specifically this means that if the case is settled or resolved in a manner in which title to the property becomes unencumbered, the contingency fee would not apply to the house itself, but only to other damages that were paid in connection with the settlement or collection of a judgment.

Job Number: 16039-001
Custom Filename: Newman
Date: 02/08/2016
Billed Words: 2069

Fraudsters Radio

Storm Bradford & Laurie Z’s new radio program exposing frauds and scammers will launch in April. The maiden show will deal with foreclosure, and expose known scammers like Neil Garfield, “stall” attorneys, forensic/securitization auditor companies, and others who are lying and misleading homeowners to their detriment. This maiden show will air April 5th 2018.

Garfield Thinks the Busets got Abused by Florida’s 3DC

Dear Neil Garfield:

Please pass my comments below on to J. Guggenheim, author of the recent screed at the LivingLies blog complaining about the Florida’s 3rd DCA opinion ordering the foreclosure in HSBC v Buset.

Florida’s 3rd Circuit panel echoed similar rulings all over the country as it trounced the specious arguments of the amateur litigators of HSBC v Buset.

“Amateur?” you ask. “Really? You mean Florida attorney Bruce Jacobs, and his muse attorney Neil Garfield?”

Yes, I mean EXACTLY THAT. Those attorneys are AMATEURS. Why? Because they lodged arguments that foreclosure pretense defense attorneys across the land have lodged in their failing efforts to buck against a rightful foreclosure of a mortgage loan that the borrower breached by failing to make timely payments. Only amateurs do something so stupid that has such predictable results.

Oh yes, the amateur did a fake Easter Egg hunt and found the colorful, fake eggs in the form of robosigning, fake “legal” expertise from an out-of-state attorney witness, fake unclean hands, fake inadmissibility of legitimate business records, irrelevant violations of the PSA, irrelevant broken chain of note ownership during securitization, and fake application of UCC article 9 non-negotiability of the note. He somehow got the trial court judge to embrace those absurdities, and send HSBC forth without day, forgetting the 1872 SCOTUS opinion in Carpenter v Longan that the mortgage follows the note. But the 3rd district panel sent that judge back to foreclosure law school for a much needed lesson, and ordered her to deliver a final judgment of foreclosure.

And here’s the ultra-bad news for the borrowers, the Busets: HSBC will demand and get legal fees because the Florida uniform mortgage security instrument says the borrower must pay costs of collecting the debt, and those costs include legal fees.

Guggenheim complains, “The court is methodically eroding every resource and tool a homeowner has and interfering with due process… The court is basically telling loan servicers to perfect their crime before they file to foreclose and the court will facilitate their crime spree.”

No, the court is NOT doing that. It is explaining what was never a resource or tool to begin with, and is making these points:

  1. The note holder or his agent has the right to enforce the note;
  2. The convolutions of robosigning and securitization have no bearing on the foreclosure process, especially when the note was endorsed in blank; and
  3. If you want to beat the bank, show how the borrower got INJURED in the loan transaction.

One might mistakenly think that an attorney who specializes in foreclosure defense would become competent at item 3 above. In reality, such attorneys never develop that expertise because they prefer to bilk the client for a losing foreclosure defense than to do the study and work required to find and prove injuries in the appraising, mortgage brokering, lending, closing, and servicing processes.

For that, the borrower needs a competent MORTGAGE EXAMINER. And then maybe some adventurous attorney will develop the evidence of injuries from the examination report into cogent causes of action with which to hammer the injurious parties into a settlement, or competently argue them before a court of law and obtain monetary awards for the injured borrower.

THAT is what borrowers want from their foreclosure pretense defense attorneys. And strangely, that is what none of them seem inclined to deliver.

Meanwhile, let’s set the record straight. the 3rd District panel did not abuse the Busets. Their attorney did. He, in his blind and Quixotic arrogance, charged ahead with frivolous arguments and cost his clients a small fortune for the privilege of losing their home to foreclosure when, had he done as I recommend above, he might have won money damages for them.

Bob Hurt
Mortgage Attack

Neil Garfield Still Scamming And Lying After All These Years

Almost on a daily basis Neil Garfield posts something on his blog that is factually and legally incorrect. He continues to tell homeowners or anyone else who’s dumb enough to listen, that a mortgage transaction borrower can send a Notice of Right to Cancel, to their bank, outside of the unconditional period (3 days), regardless if there actually was a TILA violation; regardless of the type of loan; regardless of the statute of limitations;  regardless of the unwinding process; regardless of “status quo ante;” that a homeowners mortgage transaction is void.

Moreover, he claims that a homeowner does not have to tender; the courts can’t interfere; the bank must acknowledge there is a rescission with 20 days; and if not the homeowner will get his home free and clear; the bank must file a lawsuit; the borrower NEVER has to file a lawsuit; rescission is not a claim; the mortgage transaction was not actually “consummated;” ad nauseum.

The facts are everyone of those claims of his is a known lie, backed by hundreds of cases.

It is clear that Garfield is either insane, or he is knowingly defrauding homeowners.

If anyone thinks they have been defrauded by Garfield, you’re probably right, and the only way to get this cancer off of homeowners is to report him to the authorities, and sue him for either disgorgement of fees, or malpractice.

Judges Spank Garfield Disciple for Scam TILA Rescission Arguments

Neil Garfield, Esq:

You might feel particular chagrin over this trio of judgments that shred some of your favorite TILA rescission delusions.  Litigant Dana Grant-Covert foolishly propounded them in New Jersey Bankruptcy Court.

The judge shredded those frivolous legal theories, leaning heavily on the very good lessons from Mortgage Examiner Storm Bradford’s stellar performance in his own TILA rescission case, which hundreds of courts have cited.

Bradford and his family have luxuriated in their Washington, D.C. area home for 9 years since he initiated rescission of his loan under TILA.  The creditor, for some mysterious reason, has still failed to tender in spite of Bradford’s stated ability to.

Grant-Covert appealed and lost in both NJ USDC and the 3rd Circuit.

She could become the poster child for losing TILA rescission in the Garfield tradition.  She sought TILA rescission of a purchase money loan years after end of the 3 year repose period even though no TILA violation occurred, and claimed the loan was never consummated – you cannot rescind a contract that was not consummated.

Please stop leading your trusting followers over a cliff of litigation disaster.

See the full opinion of the Bankruptcy Court appended below.
Bob Hurt
727 669 5511


Bankr. Court, D. New Jersey, 2016 – Google Scholar
The matter before the court is a core proceeding pursuant to 28 USC § 157(b)(2)(O), and the court has jurisdiction pursuant to 28 USC § 1334, 28 USC § 157(a) and the Standing Order of Reference issued by the United States District Court for the District of New Jersey on July 23,
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Dist. Court, D. New Jersey, 2016 – Google Scholar
… On February 27, 2007, debtor/appellant Dana N. GrantCovert borrowed $265,900 from Weichert Financial Services in connection with the purchase of her residence on 69 Green Vale Road, Cherry Hill, New Jersey … In re United Healthcare Sys., Inc., 396 F.3d 247, 249 (3d
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Court of Appeals, 3rd Circuit, 2016 – Google Scholar
Because the parties are familiar with the history and facts of the case, we will limit our discussion to those facts essential to our decision. Appellant filed a Chapter 7 bankruptcy proceeding in June of 2015. Wells Fargo Bank, NA, claiming to be a secured creditor based on a first mortgage
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******************  In Re Grant-Covert ************************

In Re: Dana N. Grant-Covert, Chapter 7.
Dana N. Grant-Covert, Plaintiff,
Mortgage Access Corp., d/b/a Weichert Financial Services, Wells Fargo Bank, NA, Zucker, Goldberg & Ackerman, LLC, and Reed Smith LLP, Defendants.

Case No. 15-20394-ABA, Adv. No. 15-2041-ABA.United States Bankruptcy Court, D. New Jersey.

November 18, 2016.



ANDREW B. ALTENBURG, Jr., Bankruptcy Judge.

The plaintiff/debtor, Dana N. Grant-Covert (“Plaintiff”), filed an adversary proceeding against Mortgage Access Corp. d/b/a Weichert Financial Services (“Weichert”), Wells Fargo Bank, NA (“Wells Fargo”), Zucker, Goldberg & Ackerman, LLC (“ZGA”), and Reed Smith LLP (“Reed Smith”), seeking to rescind a mortgage pursuant to the Truth in Lending Act, 15 U.S.C. § 1601, et. seq., (“TILA”). Weichert filed a motion to dismiss, which will be granted.

The matter before the court is a core proceeding pursuant to 28 U.S.C. § 157(b)(2)(O), and the court has jurisdiction pursuant to 28 U.S.C. § 1334, 28 U.S.C. § 157(a) and the Standing Order of Reference issued by the United States District Court for the District of New Jersey on July 23, 1984, as amended on September 18, 2012, referring all bankruptcy cases to the bankruptcy court. The following constitutes this court’s findings of fact and conclusions of law as required by Federal Rule of Bankruptcy Procedure 7052 material to this decision.


On June 2, 2015 Plaintiff voluntarily filed for protection under chapter 7 of the United States Bankruptcy Code. On July 15, 2015 the Plaintiff filed an adversary complaint in her bankruptcy case against Weichert, Wells Fargo, Reed Smith and ZGA. Doc. No. 1. On November 23, 2015, this court granted a Motion to Dismiss filed by Reed Smith and Wells Fargo Bank (the “Wells Fargo Opinion”). See Doc. Nos. 21, 22. On January 20, 2016, the court dismissed the complaint as against ZGA on its own Order to Show Cause for the failure to obtain relief from the stay against ZGA, which had filed its own bankruptcy case. Doc. No. 43. Thus only Weichert remains as a defendant.

On December 21, 2015 Weichert purported to answer the complaint by letter filed by an assistant vice president, Doc. No. 37, but the court entered an Order to Show Cause why that answer should not be stricken for failure to appear through counsel. Doc. No. 38. Before the Show Cause Order was heard, the Plaintiff filed a Request to Enter Default against Weichert. Doc. No. 40. Weichert not responding to either, the court struck Weichert’s answer on January 19, 2016 and entered default against Weichert on January 21, 2016. Doc. No. 44.

On June 23, 2016, this court entered an Order to Show Cause why the adversary proceeding should not be dismissed as to Weichert for the Plaintiff’s failure to seek default judgment against it. Doc. No. 50. Weichert then filed a Motion to Vacate Entry of Default. Doc. No. 54. This court granted that motion by order dated September 1, 2016. Doc. No. 59. Weichert then filed a Motion to Dismiss Adversary Proceeding, on September 9, 2016, Doc. No. 62, but failing to properly serve it, withdrew that document and re-filed it on September 26, 2016 with proper service. Doc. No. 64. The Plaintiff filed a Certification in Opposition to Motion to Dismiss Adversary Proceeding on November 7, 2016. Doc. No. 72. Weichert then filed a Response to the Plaintiff’s Opposition. Doc. No. 73.

This court held a hearing on November 15, 2016 on the motion, and the matter is now ripe for consideration.


As this is a motion to dismiss, the court must accept as true all of the factual allegations contained in the complaint. Ashcroft v. Iqbal, 556 U.S. 662, 678 (2009). Accordingly, this court recites the facts as alleged by the Plaintiff. In addition, as the Complaint was filed by a self-represented party, the court shall construe it liberally in favor of the Plaintiff. Telfair v. Tandy, No. CIV.A. 08-731(WJM), 2008 WL 4661697, at *3 (D.N.J. Oct. 20, 2008) (citing Erickson v. Pardus, 551 U.S. 89, 94 (2007)). In doing so, it also considers the documents attached to the Complaint, Pryor v. Nat’l Collegiate Athletic Ass’n., 288 F.3d 548, 559-560 (3d Cir. 2002), particularly to the extent that they contradict the Plaintiff’s allegations. See Adler Engineers, Inc. v. Dranoff Properties, Inc., CIV. 14-921 RBK/AMD, 2014 WL 5475189, at *2 (D.N.J. Oct. 29, 2014) (accepting number stated in attached contract rather than number alleged by the plaintiff in the complaint).

On February 12, 2007, the Plaintiff and Jason Covert executed a promissory note and security agreement on her personal dwelling, located at 69 Greenvale Road, Cherry Hill, New Jersey. Complaint, ¶ 32 and ex. B. Upon completion of the transaction, Weichert “transferred servicing right of the loan to Wells Fargo” thus the “Weichert Disclosure Statement being a `lender’ was not `accurate.’ See [15] U.S.C. 1638(a).” Id., at ¶ 33. The Plaintiff further alleges that:

On February 12, 2007 to present, Weichert and its successors and assigns violated multiple counts of Truth in Lending Act by failing to disclose to Plaintiff who the true lender is and using subterfuge to hide the fact that Weichert acted as a “lender” at closing and were paid to pose as the “lender” when in fact the lender is undisclosed unregistered third party.

Id., at ¶ 34.

The Plaintiff argued that, as a result, the transaction “was never consummated” and “[t]he limitation on the right to rescind was extended indefinitely.” Id., at ¶ 35.

The note attached to the Complaint, dated February 12, 2007, identifies the lender as Weichert Financial Services in a loan of $265,900. Complaint, ex. B. The note is signed by the Plaintiff and Jason Covert as borrowers, and is stamped “Pay to the order of Wells Fargo Bank, NA, without recourse Weichert Financial Services.” Id. A mortgage, also dated February 12, 2007, was entered into by the Plaintiff and Mr. Covert, with MERS solely as nominee for lender Weichert Financial Services. Id. The mortgage states that the borrowers mortgaged the property for the purpose of obtaining $265,900, the property “[b]eing the same premises conveyed to the mortgagors herein mentioned by deed dated and recorded simultaneously herewith. The within mortgage is a first purchase money mortgage, the consideration for which constitutes part of the purchase price of the property.” Id., p. 2.

More than eight years later, on March 23, 2015, the Plaintiff sent “Notices of Rescission/Cancellation” to Weichert, Wells Fargo, and Mortgage Electronic Registration Systems (“MERS”). Id., at ¶¶ 37, 40, 43; ex. C. Since none responded within 20 days she contends that the rescission is “affected [sic] and fully enforced and Plaintiff is entitled to the benefits and reimbursements accorded under the TILA.” Id., at ¶¶ 39, 42, 45. She argued that the mortgage is now “extinguished and any rights under the mortgage have terminated.” Id.

The notices sent by Plaintiff and Mr. Covert stated that rescission was based on the following violations:

(a) Weichert Financial Services failed to disclose to Jason Covert who the true lender is and as a result the transaction did not consummate;

(b) Weichert Financial Services did not fund the loan;

(c) Weichert Financial Services posed as a straw entity in dealing with me;

(d) Jason Covert did not receive two signed copies of the loan documents from lender;

(e) Jason Covert did not receive two copies of a Right to Rescind/Cancel Notice as required by law from lender. All consumers with rescission rights must receive two copies of signed loan documents and a Right to Rescind/Cancel Notice from lender.

Complaint, ex. C. An identical list of violations naming the Plaintiff was also included in the letter. Id. Both the Plaintiff and Jason Covert signed the letter under the words “I wish to cancel.” Id.

A signed certified mail card acknowledging receipt of the Notice to Rescind from Weichert supports that the notice was received. Complaint, ex. D. See In re Cendant Corp. Prides Litig., 311 F.3d 298, 304 (3d Cir. 2002) (noting rebuttable presumption that properly addressed and stamped mail was received).

The Plaintiff’s first cause of action seeks enforcement of her rescission of the transaction. Complaint, p. 11. She argues that she had a right to rescind pursuant to 15 U.S.C. § 1635 due to the failure to properly disclose the lender, and her sending notice of that intent effected that rescission. Id., ¶¶ 47-53. She further argues that she is entitled to her costs to enforce the rescission pursuant to 15 U.S.C. § 1640(a)(3). Id., at ¶¶ 56, 58. She states that she acted within the one year statute of limitations of section 1635, measured from the date she sent the notices of rescission. Id., at ¶ 57.

The Plaintiff’s second cause of action seeks enforcement of the rescission under 12 C.F.R. § 226.23. The Plaintiff again argues that rescission was effective as of her mailing of the notices, and that she did not need to first tender the proceeds received under the transaction, citing the Supreme Court’s Jesinoski v. Countrywide Home Loans, Inc., decision. Id., at ¶¶ 62-63, 76. In this count, she adds an allegation that she was never provided closing documents, “called `material disclosures[.]'” Id., at ¶ 67. She argues that the latter entitles her to damages including twice the finance charge, actual damages, and costs, citing 15 U.S.C. § 1640. Id., at ¶ 84.

In her third cause of action, the Plaintiff alleges that the transaction was never consummated. Id., at ¶ 95. “Under these circumstances, the loan is not `consummated’ until the actual lender is identified, because until that point there is no legally enforceable contract.” Id., at ¶ 95. She alleges that because of this, the requirement that she rescind within three years “after the date of the consummation of the transaction” does not apply. Id., at ¶¶ 92, 97.

A fifth count[1] seeks “Enforcement of Restitution” pursuant to 12 C.F.R. § 1026.23(d)(2). The Plaintiff here repeats her allegation about the lender not being identified, the loan not being consummated, and failure of the defendants to file a lawsuit within 20 days of receiving the Notices of Intent to Rescind. Id., at ¶¶ 3, 6. She requests that the court issue a declaratory judgment that the note and mortgage are rescinded and that all monies paid by her, plus fees, costs and damages, should be returned. Id., at ¶ 7.

The Plaintiff’s Prayer for Relief includes enjoining any state court proceeding against her, return of the note marked cancelled, return of the mortgage, actual damages pursuant to 15 U.S.C. §§ 1640(a)(1) and 1611, statutory damages of twice the finance charge pursuant to 15 U.S.C. § 1640(a)(2), costs and reasonable attorney’s fees pursuant to 15 U.S.C. § 1640, return of $71,415.27 plus escrow fees, costs and assessments, and closing costs, compensatory damages and damages for emotional distress, and such other relief as the court deems just and proper. Id., at pp. 23-24.

Finally, the court notes that the Plaintiff filed a no asset chapter 7 case on June 2, 2015. See Fed. R. Evid. 201 (incorporated into bankruptcy cases by Fed. R. Bankr. P. 9017) (the court may take judicial notice of the documents filed by the debtor); Maritime Elec. Co., Inc. v. United Jersey Bank, 959 F.2d 1194, 1200 n. 3 (3d Cir. 1991); Levine v. Egidi, 1993 WL 69146, at *2 (N.D. Ill. 1993); In re Paolino, 1991 WL 284107, at *12 n. 19 (Bankr. E.D. Pa. 1991); see generally In re Indian Palms Associates, Ltd., 61 F.3d 197 (3d Cir. 1995). On Schedule A she disclosed joint ownership of her residence, located at 69 Greenvale Road. She estimated the value of her interest in the property as $167,400 and the amount of the secured claim as $265,000. On Schedule D, she disclosed a creditor of a claim in the amount of $521,181.27 incurred on February 12, 2007 as “unknown unsecured nonpriority ??” and as unliquidated and disputed.


A. Objection to hearing the Motion to Dismiss

Preliminarily, the court notes that at the hearing held on this motion, the Plaintiff objected to Weichert’s asserting a motion to dismiss, stating that Weichert had received “excessive opportunities to answer, in which they failed. I move the court to rule in my favor based on due process and equal protection. A default should be in place. There’s been no excusable reason presented as to why they have neglected. However they have. So this violates my equal protection. Generally speaking, people in my position would not be given multiple opportunities to respond.” Audio, 11/15/16 at 2:05. The court denied the Plaintiff’s request from the bench, noting that the issue of Weichert’s filing of an answer pro se, entry of default, and vacating of the entry of default, had been argued by the parties and decided previously by the court on September 1, 2016. See Doc. No. 59.

B. Motion to Dismiss

Weichert proceeds pursuant to Federal Rule of Civil Procedure 12(b)(6), incorporated into bankruptcy adversary proceedings by Federal Rule of Bankruptcy Procedure 7012(b). Rule 12(b)(6) provides for the dismissal of a complaint if a plaintiff fails to state a claim upon which relief can be granted. Stover v. Freedom Health Care, No. CIV. 13-119 WJM, 2013 WL 2420643, at *1 (D.N.J. June 3, 2013). The moving party bears the burden of showing that no claim was stated. Hedges v. United States, 404 F.3d 744, 750 (3d Cir. 2005). The Supreme Court has instructed that the court must engage in “a context-specific task that requires [it] to draw on its judicial experience and common sense” to determine whether the complaint states a plausible claim for relief. Ashcroft v. Iqbal, 556 U.S. at 678.

Weichert argues that as the TILA does not apply to a “residential mortgage transaction,” which includes purchase money mortgages, the remedy of rescission is not available to the Plaintiff. It continues that, even if she had a right to rescission, the claim would be barred by the statute of limitations. Moreover, as these issues were decided by this court in the Wells Fargo Opinion, that decision should continue to govern.[2]

1. Residential Mortgage Transaction

Rescission is not available to a borrower in “a residential mortgage transaction as defined in section 1602[x] of this title[.]” 15 U.S.C. § 1635(e)(1), 12 C.F.R. §§ 226.23(f)(1), 1026.23(f)(1). Section 1602(x) provides:

(x) The term “residential mortgage transaction” means a transaction in which a mortgage, deed of trust, purchase money security interest arising under an installment sales contract, or equivalent consensual security interest is created or retained against the consumer’s dwelling to finance the acquisition or initial construction of such dwelling.

15 U.S.C.A. § 1602(x). See In re Ramirez, 329 B.R. at 732 (stating that rescission available only for non-purchase money consumer credit transactions secured by the consumer’s home). Logically, where rescission does not apply, a creditor has no obligation to deliver a notice of right of rescission. Perkins v. Cent. Mortgage Co., 422 F. Supp. 2d 487, 489 (E.D. Pa. 2006).

But the Plaintiff now argues that subsection (x) only excludes a “purchase money security interest arising under an installment sales contract.” She states that since her transaction did not involve an installment sales contract, it is not excluded from the rescission remedy of section 1635.

While the court agrees that the Plaintiff did not enter into an installment sales contract, it disagrees with her reading of section 1602(x). Though a purchase money security interest arising under an installment sales contract is excluded, the statute also expressly excludes a mortgage, a deed of trust, and any other equivalent consensual security interest that is created or retained against the consumer’s dwelling to finance the acquisition or initial construction of such dwelling. The mortgage documents here clearly show that the Plaintiff purchased her home with the proceeds from this loan—a fact the Plaintiff does not deny. As a mortgage was created or retained against her residence to finance her purchase of the residence, it is a residential mortgage transaction that is excluded from the rescission provision of TILA and Plaintiff’s claim fails.

2. Failure to Respond to Notice of Intent to Rescind

It then follows that the Plaintiff’s sending notices of rescission did not bring about a rescission of the note and mortgage. Dalton v. Countrywide Home Loans, Inc., 828 F. Supp. 2d 1242, 1249 (D. Colo. 2011) (holding that section 1635 did not apply to allow the plaintiff to rescind the transaction and thus the three-year statute of limitations in section 1635(f) did not assist her, because the definition under section 1602(x) of exempt transactions includes loans obtained by the plaintiff to finance the purchase of her primary residence). Therefore Weichert did not violate TILA by refusing to honor the purported rescission and it is not liable for damages under section 1640.

But the Plaintiff argues that her rescission attempt was successful because, regardless of whether she was entitled to rescind, Weichert had to respond within 20 days. “The instant suit is to enforce the steps after rescission, and NOT a suit to make the rescission effective by operation of law.” Doc. No. 72, p. 10 (emphasis in original). Plaintiff cited 12 C.F.R. § 226(d)(2) as supporting that Weichert was required to respond, else it would be liable to her.

Section 1635 provides that “[w]ithin 20 days of receipt of a notice of rescission, the creditor shall return to the obligor any money or property given as earnest money, downpayment, or otherwise, and shall take any action necessary or appropriate to reflect the termination of any security interest created under the transaction.” 15 U.S.C. § 1635(b). Thereafter, “the obligor shall tender the property to the creditor, except that if return of the property in kind would be impracticable or inequitable, the obligor shall tender its reasonable value.” Id. “If the creditor does not take possession of the property within 20 days after tender by the obligor, ownership of the property vests in the obligor without obligation on his part to pay for it.” Id.

Section 226.32(d)(2) of Title 12 of the Code of Federal Regulations, cited by the Plaintiff, provides:

(d) Effects of rescission. . . .

(2) Within 20 calendar days after receipt of a notice of rescission, the creditor shall return any money or property that has been given to anyone in connection with the transaction and shall take any action necessary to reflect the termination of the security interest.

12 C.F.R. § 226.23(d)(2).

Both section 1635(b) and section 226.23(d) provide for court discretion, the former stating “The procedures prescribed by [15 U.S.C. § 1635(b)] shall apply except when otherwise ordered by a court.” 15 U.S.C. § 1635(a) (last sentence), and the latter stating “The procedures outlined in paragraphs (d)(2) and (3) of this section may be modified by court order.” 12 C.F.R. § 226.23(d)(4).

As explained in the Wells Fargo Opinion, courts have construed sections 1635(b) and 226.32(d) as not automatically voiding a transaction. “[U]nder § 1635(b), the lender has twenty days to decide whether it will (i) recognize the existence of a rescission right and privately arrange rescission with the borrower and any other interested parties, or instead (ii) dispute the existence of a rescission right and await the borrower’s initiation of suit.Bradford v. HSBC Mortgage Corp., 838 F. Supp. 2d 424, 429 (E.D. Va. 2012) (emphasis supplied). The notice of intent is just that—making the lender aware that the borrower intends to rescind, not a rescission in fact. Id. Thus when a lender does not respond within 20 days, the borrower may, as the Plaintiff did here, file an action seeking to enforce rescission. Id. As explained by the Ninth Circuit Court of Appeals: “Otherwise, a borrower could get out from under a secured loan simply by claiming TILA violations, whether or not the lender had actually committed any. Rather, under the statute and the regulation, the security interest `becomes void’ only when the consumer `rescinds’ the transaction. In a contested case, this happens when the right to rescind is determined in the borrower’s favor.” Yamamoto v. Bank of New York, 329 F.3d 1167, 1172 (9th Cir. 2003) (emphasis in original). See also Lenhart v. Bank of Am., N.A., 2:12-CV-4184, 2013 WL 1814820, at *7 (S.D. W. Va. Apr. 29, 2013) (noting that a creditor might be liable for damages under section 1640 if it improperly refused rescission).

In coming to this conclusion, the Bradford court discussed American Mortgage Network, Inc. v. Shelton, 486 F.3d 815 (4th Cir. 2007), which affirmed that a secured loan “is rendered void only when a creditor voluntarily voids the security interest or a court orders rescission.Bradford v. HSBC Mortgage Corp., 838 F. Supp. 2d at 430, citing Shelton at 821. The Shelton court described this as the majority view of reviewing courts. American Mortgage Network, Inc. v. Shelton, 486 F.3d at 820-21. The Bradford court explained its reasoning:

Because § 1635(b) merely prescribes `procedural requirements’ that a district court may adapt at its discretion, it is clear that mere notice of intent to rescind does not trigger a lender’s obligation to effect rescission immediately given that a lender cannot know with certainty ex ante whether a court will deny rescission or modify the procedure for effecting rescission. In other words, § 1635(b) cannot, at once, be a set of default procedures a court may equitably alter after a borrower’s notice of intent to rescind and, at the same time, require a lender to effect rescission immediately upon receiving such notice.

Bradford v. HSBC Mortg. Corp., 838 F.Supp.2d at 433-34. See Iroanyah v. Bank of Am., N.A., 851 F. Supp. 2d 1115, 1125 (N.D. Ill. 2012) (following Bradford), aff’d sub nom. Iroanyah v. Bank of Am., 753 F.3d 686 (7th Cir. 2014).

Since this court’s Wells Fargo Opinion, at least one more court has agreed with this analysis. In Sluka v. Rushmore Loan Mgmt. Servs., LLC, 16-00357 JMS-KSC, 2016 WL 6275387 (D. Haw. Oct. 26, 2016), the plaintiff similarly argued “that Defendant’s failure to respond to her notice of rescission within 20 days entitles her to rescission even though the notice is time-barred.” Id., at *3. The court explained that “the statute is not self-effectuating and imposes no automatic obligation on Defendant to rescind the mortgage loan.” Id. “Construing the statute otherwise `would give TILA claimants the right to simply walk away with a windfall . . . without any further obligation,’ a result certainly not intended by Congress.'” Id. (quoting Bradford v. HSBC Mortg. Corp., 838 F. Supp. 2d at 429, which was quoting Shelton, 486 F.3d at 820). See Baker v. Bank of Am., N.A., 5:13-CV-92-F, 2014 WL 298909, at *6 (E.D.N.C. Jan. 27, 2014) (same) (appeal pending).

The Jesinoski opinion cited by the Plaintiff is not to the contrary. There, the Supreme Court stated that “The language [of section 1635(a)] leaves no doubt that rescission is effected when the borrower notifies the creditor of his intention to rescind.” Jesinoski v. Countrywide Home Loans, Inc., 135 S. Ct. 790, 792 (2015). But it so stated in determining whether an obligor had to notify a creditor of rescission within three years, or actually sue within three years: “It follows that, so long as the borrower notifies within three years after the transaction is consummated, his rescission is timely. The statute does not also require him to sue within three years.” Id. See Sherzer v. Homestar Mortgage Servs., 707 F.3d 255 (3d Cir. 2013) (same). The Supreme Court was concerned only with the statute of repose. The decision does not stand for allowing a rescission where one has no such right.

Plaintiff’s theory here, that she can rescind by default, is correspondingly incorrect. As explained to the Plaintiff several times throughout this case, where a defendant fails to answer a complaint, the plaintiff must still prove that he or she has cause for relief. Pfeiffer v. Wulster, 09-13388 MBK, 2011 WL 1045355, at *2 (Bankr. D.N.J. Mar. 17, 2011) (stating that plaintiff must demonstrate a prima facie case to be entitled to entry of judgment by default), aff’d sub nom. In re Wulster, ADV 09-2015 MBK, 2012 WL 589564 (D.N.J. Feb. 22, 2012). Thus, even had Weichert not appeared in this proceeding, the Plaintiff would not have won her case, as she has no right to rescind under TILA.

3. Statute of Limitations

Both Weichert and the Plaintiff are correct on parts of their statute of limitations arguments. A creditor who fails to comply with any requirement under section 1635—which provides for rescission—may be liable for certain damages, including “in the case of any successful action to enforce the foregoing liability or in any action in which a person is determined to have a right of rescission under section 1635 or 1638(e)(7) of this title, the costs of the action, together with a reasonable attorney’s fee as determined by the court[.]” 15 U.S.C. § 1640(a)(3). An action for damages for violation of section 1635 may be brought within one year from the date of the occurrence of the violation. 15 U.S.C. § 1640(e). Thus, the Plaintiff is correct that she had one year from Weichert’s failure to respond to her Notice of Intent to Rescind to bring a lawsuit to seek damages for failure to rescind. She sent those notices on March 23, 2015 and filed this adversary proceeding on July 15, 2015, thus was within the one year period.

But an obligor’s right to rescind runs “until midnight of the third business day following the consummation of the transaction or the delivery of the information and rescission forms required under this section together with a statement containing the material disclosures required under this subchapter, whichever is later.” 15 U.S.C. § 1635(a). If the creditor never delivers the material disclosures, as alleged here, then an obligor has “three years after the date of consummation of the transaction or upon the sale of the property, whichever occurs first,” to assert a right of rescission. 15 U.S.C. § 1635(f); 12 C.F.R. § 226.23(a)(3). The Supreme Court has stated that the latter “talks not of a suit’s commencement but of a right’s duration.” Beach v. Ocwen Fed. Bank, 523 U.S. 410, 417 (1998). This has been interpreted to mean that, rather than a statute of limitations, the three-year period is a statute of repose. In re Cmty. Bank of N. Virginia, 622 F.3d 275, 301 n. 18 (3d Cir. 2010), as amended (Oct. 20, 2010). Statutes of repose are not subject to extension by application of equitable tolling. Williams v. Wells Fargo Home Mortgage, Inc., 410 Fed. Appx. 495, 499 (3d Cir. 2011). Thus the three-year period is absolute. Luther v. Wells Fargo Bank, 4:11CV00057, 2012 WL 4405318, at *4 (W.D. Va. Aug. 6, 2012).

Therefore, even if the Plaintiff had a right to rescind, because she did not seek to rescind within three years from the date of consummation of the transaction, she cannot sue to enforce rescission or for damages for failure to rescind. The transaction occurred on February 12, 2007. She sent the Notices of Intent to Rescind more than eight years later, on March 23, 2015. Since she did not timely rescind, she has no cause of action for failure to rescind. Smith v. Fid. Consumer Disc. Co., 898 F.2d 896, 903 (3d Cir. 1990) (“The Coplins’ entitlement to statutory damages under 15 U.S.C. § 1640 is, therefore, wholly dependent upon, and flows directly from, their entitlement to rescissory relief.”); Maines v. Guillot, 5:16CV00009, 2016 WL 3556258, at *3 (W.D. Va. June 16, 2016) (“Because the plaintiff no longer had the right to rescind her 2005 loan transaction at the time foreclosure proceedings were initiated in 2015, she has no plausible claim for damages under TILA.”).

The Plaintiff argues that the statutes of limitations never ran because “the transaction was never consummated as alleged in the complaint, a fact that must be taken as true on the 12(b)(6) motion.” The basis of that allegation in the Complaint was that the “true lender” was never disclosed. But the Plaintiff also alleges that “Upon completion of the signing of the loan documents on February 12, 2007, Weichert has transferred servicing right of the loan to Wells Fargo [sic] Weichert Disclosure Statement being a `lender’ was not `accurate.'” Complaint, ¶ 33. Lenders and servicers are two distinct roles: Wells Fargo being the servicer did not negate Weichert being the lender. The mortgage documents the Plaintiff attached to her Complaint clearly show that Weichert originated this mortgage. See Jiaxing Hongyu Knitting Co. v. Allison Morgan LLC, 11 CIV. 09342 AJN, 2013 WL 81320, at *6 (S.D.N.Y. Jan. 8, 2013) (stating that documentary evidence attached to a complaint that contradicted the allegations of the complaint may render the allegations insufficient to defeat a motion to dismiss). That Weichert transferred it after consummation does not mean either than the transaction was not consummated or that Weichert was not the lender.

The Plaintiff also asserts that the transaction was not consummated because she cancelled it in 2015 when she sent her notices of rescission. “Consummation means the time that a consumer becomes contractually obligated on a credit transaction.” 12 C.F.R. § 226.2(a)(13). The Plaintiff alleged in her Complaint that “On February 12, 2007, in anticipation of a home loan in the amount of $265,900.00, Dana Grant-Covert executed a promissory note and security agreement on Plaintiff’s personal dwelling[.]” Complaint, ¶ 32. Thus she admits that she entered into the transaction. Indeed, had the loan transaction never consummated, the Plaintiff could not have purchased her residence. And she could not later cancel something that did not occur in the first place.

The Plaintiff also cites Jesinoski v. Countrywide Home Loans, Inc., 135 S. Ct. 790 (2015), for the proposition that the statute of limitations did not run. But as explained above, Jesinoski held that a borrower need only send a written notice of intent to rescind within three years of the transaction, not file suit within that period.

4. The Accardi doctrine

One argument of the Plaintiff remains. In her opposition to the Motion to Dismiss, she asserts that:

This Court is bound by the Accardi Doctrine and cannot decline jurisdiction by dismissing the complaint, such action would constitute an abandonment of, inter alia, multiple Supreme Court Precedent, misapplication of the Rooker-Feldman Doctrine, misinterpretation and misapplication of TILA and Regulation Z, violation of the Federal Rules of Civil Procedure which govern almost all litigations in this Court; and in doing so the Court would not construe the Federal Rules of Evidence to secure fairness to the end that the truth may be ascertained and proceeding justly determined in accordance with the Accardi Doctrine.

Doc. No. 72, p. 9.

The Plaintiff argues that the doctrine, based on United States ex rel. Accardi v. Shaughnessy, 347 U.S. 260 (1954), stands for the proposition that administrative agencies must follow their own regulations. She alleges that this court is a federal agency, citing 28 U.S.C. § 2671. Id., pp. 8-9.

The Accardi decision held that an agency’s failure to comply with its own rules automatically nullified its actions. Leslie v. Attorney Gen. of U.S., 611 F.3d 171, 178 n.4 (3d Cir. 2010). The Third Circuit Court of Appeals distinguished this to apply only where the regulation was “promulgated to protect fundamental statutory or constitutional rights[.]” Id., at 178.

This doctrine has no application to this case, as this court is not a federal agency. Section 2671 of Title 28, cited by the Plaintiff, defines agencies only for the purpose of the Federal Tort Claims Act, which “protects Federal employees from personal liability for common law torts committed within the scope of their employment, while providing persons injured by the common law torts of Federal employees with an appropriate remedy against the United States.” Pub. L. 100-694, § 2, Nov. 18, 1988, 102 Stat. 4563. It is not applicable here.

The court knows of no regulations applicable to bankruptcy courts and the Plaintiff did not proffer any. Rather, the Bankruptcy Code and the Federal Rules of Bankruptcy Procedure govern cases brought in this court. Dismissing an adversary proceeding for failure to state a cause of action under Federal Rule of Civil Procedure 12(b) (incorporated into adversary proceedings by Federal Rule of Bankruptcy Procedure 7012), is not a declination of jurisdiction, but a proper exercise of the court’s jurisdiction over adversary proceedings.


The Plaintiff failed to state causes of action against Weichert, the Motion to Dismiss all counts against Weichert will be granted.

An appropriate judgment will be entered consistent with this decision.

The court reserves the right to revise its findings of fact and conclusions of law.

[1] The Plaintiff’s fourth count alleges violation of 15 U.S.C. § 1611 by Wells Fargo and ZGA and therefore is not relevant here.

[2] Weichert’s argument that the court’s decision as to Wells Fargo applies here and cannot be challenged now by the Plaintiff is well placed.

The “law of the case” doctrine reflects courts’ general reluctance to reconsider matters soundly decided. “The doctrine is designed to protect traditional ideals such as finality, judicial economy and jurisprudential integrity.” In re City of Phila. Litig., 158 F.3d 711, 717-18 (3d Cir. 1998). In many ways, “law of the case” disputes are the opposite side of the motion for reconsideration coin. The only difference between the two is the filing party: prevailing parties or similarly-situated parties seek to apply the “law of the case” against subsequent parties in similar circumstances, and losing parties seek reconsideration of the adverse decision. Not surprisingly, the Third Circuit has adopted the same basic “extraordinary circumstances” framework for reviewing “law of the case” disputes that applies to motions for reconsideration: the “law of the case” doctrine does not apply where “(1) new evidence is available; (2) a supervening new law has been announced; or (3) the earlier decision was clearly erroneous and would create manifest injustice.” In re City of Phila. Litig., 158 F.3d at 718 (citing Pub. Interest Research Group of N.J., Inc. v. Magnesium Elektron, Inc., 123 F.3d 111, 116-17 (3d Cir. 1997)); cf. N. River Ins. Co. v. CIGNA Reinsurance Co., 52 F.3d 1194, 1218 (3d Cir. 1995) (motion for reconsideration standard). However, the “law of the case” doctrine only applies to a court’s decisions of law. See, e.g., In re City of Phila. Litig., 158 F.3d at 718; Wright & Miller, Federal Practice and Procedure § 4478. In other words, dicta does not have precedential value such that a court may consider a matter previously decided.

Falor v. G & S Billboard, CIV A 04-02373(HAA), 2008 WL 5190860, at *2 (D.N.J. Dec. 10, 2008) (stating that law of the case mandated dismissal of case against defendant since case had been dismissed against other defendants on same products liability claim); McKowan Lowe & Co. v. Jasmine, Ltd., CIV. 94-5522 (RBK), 2005 WL 3500032 (D.N.J. Dec. 20, 2005), aff’d, 231 Fed. Appx. 216 (3d Cir. 2007) (holding that as absence of loss causation was now the law of the case, defendants were entitled to summary judgment).

However, as the Plaintiff is pro se, the court finds it preferable to issue this full opinion, explaining again its reasoning and why any variations on the arguments that the Plaintiff presented here yet do not entitle her to denial of this motion to dismiss.