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: https://www.floridabar.org/public/acap/assistance/
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:
JAX DAILY RECORD MONDAY, AUG. 1, 2016 12:00 PM EST
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.
DATE: February 8, 2016
RE: Vincent Newman and his Wife
Phone No.: 954-554-6487
Email Address: firstname.lastname@example.org
JUDGMENT ENTERED 2011,
SALE DATE CANCELED MULTIPLE TIMES
FEDERAL ACTION TO ENJOIN USE OF NOTE AND MORTGAGE SUGGESTED
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
Billed Words: 2069
Dear Neil Garfield:
You’ll find a serving serving of crow in the 8th Circuit’s post-Jesinoski Keiran v Home Capital, Inc., F. 3d 1127 opinion. After reading it, I imagine you will craft a huge apology to your LivingLies blog readers for misleading them for years about the proper understanding of TILA rescission AND of the Jesinoski v. Countrywide Home Loans, Inc., 135 S. Ct. 790 opinion.
Keirans propounded the same lame excuse as the Jesinoskis. They signed an acknowledgment of receipt of Right to Cancel disclosures, and later gave the court an affidavit claiming they only received one copy, instead of two, each. They appealed the judgment against them to the 8th circuit, then to SCOTUS which granted cert and remanded for consideration in light of Jesinoski. After trial and appeal, the 8th circuit affirmed the trial court’s denial of rescission and damages.
Keiran relied on the same false legal theory that you have espoused for years about TILA rescission, and yet, in the wake of Jesinoski, SCOTUS, the 8th Circuit, and USDC all agree that TILA rescission does NOT work the way you wish it did. The borrow gets NO 3-year right of rescission UNLESS a TILA violation occurred.
The SCOTUS instructs you from the Jesinoski opinion:
“The Truth in Lending Act gives borrowers the right to rescind certain loans for up to three years after the transaction is consummated. The question presented is whether a borrower exercises this right by providing written notice to his lender, or whether he must also file a lawsuit before the 3-year period elapses.”
There you have the question before the court: does conditional TILA rescission written notice or notice plus lawsuit within 3 years after consummation? Now the fun part, where SCOTUS explains TILA’s extended, conditional right to rescind requiring a TILA violation:
“Congress passed the Truth in Lending Act, 82 Stat. 146, as amended, to help consumers “avoid the uninformed use of 792*792 credit, and to protect the consumer against inaccurate and unfair credit billing.” 15 U.S.C. § 1601(a). To this end, the Act grants borrowers the right to rescind a loan “until midnight of the third business day following the consummation of the transaction or the delivery of the [disclosures required by the Act], whichever is later, by notifying the creditor, in accordance with regulations of the [Federal Reserve] Board, of his intention to do so.” § 1635(a) (2006 ed.).[*] This regime grants borrowers an unconditional right to rescind for three days, after which they may rescind only if the lender failed to satisfy the Act’s disclosure requirements. But this conditional right to rescind does not last forever. Even if a lender never makes the required disclosures, the “right of rescission shall expire three years after the date of consummation of the transaction or upon the sale of the property, whichever comes first.” § 1635(f).”
My point: Neil Garfield, you have bloviated that SCOTUS, when it gets a case like Jesinoski back, will agree with YOUR interpretation of TILA rescission law, that a TILA violation is not a condition of the extended right to rescind. Well, SCOTUS did get precisely such a case in 2015 (Keiran), and the justices and the 8th Circuit panel made it clear that NO 3- year right of rescission exists in the absence of a TILA violation.
But who needs the Keiran opinion when Justice Scalia explained conditional TILA rescission PERFECTLY in the Jesinoski opinion?
Eat some crow. I’ll do you good.
The Jesinoskis might finally understand that TILA rescission does not work the way Neil Garfield claims. They spent upwards of $750,000 on trial and appeals, and never bothered purchasing a Mortgage Examination so they could go on the attack. Instead, the case yo-yo’d between trial appellate courts, and the Jesinoskis ended up losing, badly. Here’s the summary from the most recent opinion at JESINOSKI v. Countrywide Home Loans, Inc., Court of Appeals, 8th Circuit 2018 :
Mortgage loan borrowers Larry and Cheryle Jesinoski received Truth in Lending Act (“TILA”) disclosure documents at their loan closing. Pursuant to TILA and its regulations, borrowers may rescind their loan within three days of closing, but the rescission period extends to three years if the lender fails to deliver “the required notice or material disclosures.” 12 C.F.R. 1026.23(a)(3)(i); see also 15 U.S.C. § 1635(a), (f). Admitting that the lender delivered the required notice (the “Notice”) and material disclosures, but arguing that the lender did not provide the required number of copies, the Jesinoskis sought to rescind their loan on a date just shy of the three-year anniversary of loan execution.
The lender denied rescission, asserting the Jesinoskis had signed an acknowledgment indicating receipt of the required disclosures. The Jesinoskis sued more than three years after closing, alleging TILA violations. The district court dismissed the action as untimely, holding that, even if the three-year limitation period applied, borrowers must file suit and not merely provide notice within the three-year time period. On appeal, our court affirmed, recognizing that our circuit had already taken a position on this issue within an existing circuit split. Jesinoski v. Countrywide Home Loans, Inc., 729 F.3d 1092, 1093 (8th Cir. 2013) (per curiam). The Supreme Court granted certiorari and reversed, holding the three-year limitation period applied to the provision of notice rather than the filing of suit. Jesinoski v. Countrywide Home Loans, Inc., 135 S. Ct. 790, 792 (2015).
On remand, the district court 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.
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.
Dear Neil Garfield:
I write in response to your comments at your blog article TILA RESCISSION: The Bottom Line for Now and to correct some of your misapprehensions about the Truth in Lending Act. First of all, your enumerations made some good points, But then it made some not so good. Your main baseless contention is that a borrower has the right to rescind under TILA for any reason or no reason at all after 3 days after consummation of the loan. That is dead wrong, for very good reason – it violates the stated purpose of TILA, AND it abuses honest lenders
Your first problem is myopia. You said TILA was enacted “to prevent unscrupulous banks from screwing consumer borrowers.” That is only partly true. Congress stated the purpose of TILA in 15 USC 1601:
“It is the purpose of this subchapter to assure a meaningful disclosure of credit terms so that the consumer will be able to compare more readily the various credit terms available to him and avoid the uninformed use of credit, and to protect the consumer against inaccurate and unfair credit billing and credit card practices.”
- The first purpose of TILA is to enable consumers to compare credit terms.
- The second purpose of TILA is to protect consumers from inaccurate and unfair billing and credit card practices.
Let us review 15 USC 1635, Rescission. (a) explains the borrower’s 3-day right to cancel and the creditor’s obligation to provide disclosures of that right and rescission forms to each borrower. (b) explains the loan unwinding or rescission process of lien release and mutual tender. (c) acknowledges the rebuttable presumption of disclosures in the event the borrower signed a receipt. (d) empowers the CFPB to modify or waive rights in a borrower financial emergency. (e) exempts purchase money and certain other loan activities from TILA rescission. (f) extends the rescission window to 3 years after loan consummation, or until sale of property or one year after final disposition of a rescission dispute by the court. (g) empowers the courts to award the borrower with relief in addition to rescission for creditor violations of TILA. (h) limits rescission on the basis that creditor supplied imperfect forms that still comply with regulations. (i) allows the borrower to rescind in connection with foreclosure.
It is just plain common sense that the 15 USC 1635(a)(b) TILA 3-day right to cancel a consumer loan that puts the family home at risk does not presume that the creditor is trying to screw the borrower. Rather, it allows the borrower to change his mind if he finds a more attractive loan deal or just gets “buyer remorse.” That comports with and fulfills the first purpose of TILA above.
The 3-year right to rescind fulfills purpose #2 above. Thus, the right to rescind under 15 USC 1635(f) gets triggered ONLY by a creditor breach of TILA through failure to give the borrower the requisite, timely, and accurate disclosures. The regulation at 12 CFR 1026.23(a)(3)i cements the principle in the following language:
“The consumer may exercise the right to rescind until midnight of the third business day following consummation, delivery of the notice required by paragraph (b) of this section, or delivery of all material disclosures, whichever occurs last. 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. In the case of certain administrative proceedings, the rescission period shall be extended in accordance with section 125(f) of the Act.”
You see, ONLY failure to deliver the required notice of material disclosures TRIGGERS the right to rescind within a repose window of 3 years following loan consummation, as above.
THIS is where Neil Garfield’s humbug TILA rescission theory blows a gasket and hits the skids. HE thinks the borrower may rescind after 3 days even if the creditor perfectly complied with TILA disclosure requirements.
Thus, Neil Garfield is DEAD WRONG in his assessment of TILA rescission law. Every court in the land that has ruled in a related TILA rescission case has allowed post-3-day rescission ONLY in the face of a TILA breach.
Neil Garfield confesses to that reality, of course. But he says all of those judges got it wrong, and that some day the SCOTUS will vindicate him with an opinion that supports Garfield’s Don Quixote Windmill Tilting Theory of TILA Rescission against creditors who did no wrong.
I have to burst your bubble here, Neil. THAT will NEVER HAPPEN. NOT EVER. Only a BOZO judge would ever agree with your Don Quixote Windmill Tilting TILA Rescission Theory.
Neil Garfield doesn’t stop there. He seems to think that TILA rescission applies to purchase money loans, and that borrowers get the right to rescind by mailing a rescission notice way after the 3 year repose window slammed shut, such as 8 years after consummation. Why? Because, he asserts that nobody really knows when the loan was consummated because nobody really knows who the lender was, and consummation can happen months or years after the borrower signed the loan documents.
To make it worse, he maintains that the outside-the-window, unjustified rescission deprived the court of jurisdiction because it voided the note and security instrument.
I’m bursting your bubble again, Neil, so take note. A controversy over a rescission gives the court jurisdiction. Furthermore, TILA rescission statutes 15 USC 1635(b) and (g) BOTH mention court involvement:
“(b) Return of money or property following rescission. …The procedures prescribed by this subsection shall apply except when otherwise ordered by a court.”
“(g) Additional relief. In any action in which it is determined that a creditor has violated this section, in addition to rescission the court may award relief under section 1640 of this title for violations of this subchapter not relating to the right to rescind.”
And so does Regulation Z at 12 CFR 1026.23(d)(4):
Quite apparently, the lawyers of Congress and the Executive Branch both anticipated that controversies will arise when a borrower tries to rescind without justification well into the loan period.
Neil Garfield seems to think that the creditor bears the onus of suing to prevent the rescission. That is not true either. If, after the borrower mails a rescission notice, the creditor who did no wrong refuses to release the lien or tender, the borrower has no choice but to sue or wait till the creditor forecloses to raise the rescission issue. And the borrower must do that timely, within a year after mailing rescission notice or initiation of foreclosure. Usually, the borrower stops making payments after mailing the rescission notice, and in due course the creditor forecloses, giving the borrower a chance to bring the rescission to a head.
If the creditor breached TILA and balks at releasing the lien after receiving the borrower’s rescission notice, the borrower can sue for statutory and actual damages. That is just, for a failure to release the lien prevents the borrower from refinancing in order to tender. Neil Garfield gets that part right. And enabling the borrower to refinance for tender constitutes the reason that Congress, in crafting TILA rescission law, reversed the common law tradition requiring the borrower to tender first in a rescission.
Take note, Neil Garfield. The courts do not punish creditors who can prove perfect compliance with TILA and yet refused to release the lien or tender upon receipt of the notice of rescission more than 3 days after consummation. The courts punish borrowers, just as the trial court punished the Jesinoskis, by denying their rescission effort because the creditor proved compliance with TILA.
Remember the SCOTUS Jesinoski opinion. The trial court had not reached the question of a TILA violation because it heeded 8th Circuit precedent that the borrower had to sue within 3 years after consummation, and more than 3 years had passed. THAT was the question for SCOTUS: must the borrower sue within 3 years IN ADDITION to mailing notice of intent to rescind within 3 years? SCOTUS answered NO, and remanded with this language:
“The Jesinoskis mailed respondents written notice of their intention to rescind within three years of their loan’s consummation. Because this is all that a borrower must do in order to exercise his right to rescind under the Act, the court below erred in dismissing the complaint. Accordingly, we reverse the judgment of the Eighth Circuit and remand the case for further proceedings consistent with this opinion. It is so ordered. “
The 8th Circuit and Michigan District courts complied. The trial court explained:
“The United States Supreme Court reversed, holding that a borrower exercising a right to TILA rescission need only provide his lender written notice, rather than file suit, within the 3-year period. Jesinoski v. Countrywide Home Loans, Inc.,___ U.S. ___, 135 S.Ct. 790, 792, 190 L.Ed.2d 650 (2015). The Eighth Circuit then reversed and remanded the case for further proceedings. (Doc. No. 38.) After engaging in discovery, Defendants 959*959 now move for summary judgment.”
The bank filed a motion for summary judgment, and the court opined:
“Because Plaintiffs have failed to point to evidence creating a genuine issue of fact that they could tender the unpaid balance of the loan in the event the Court granted them rescission, their TILA rescission claim fails as a matter of law on this additional ground… For the reasons discussed above, Plaintiffs’ TILA claim fails as a matter of law. Without a TILA violation, Plaintiffs cannot recover statutory damages based Defendants refusal to rescind the loan. 1. Defendants’ Motion for Summary Judgment (Doc. No. ) is GRANTED. 2. Plaintiffs’ Amended Complaint (Doc. No. ) is DISMISSED WITH PREJUDICE.”
Let’s get to the real bone of contention here. I flat don’t care whether you ballyhoo foolish, frivolous, and failing legal theories such as your notions about unjustified TILA rescission. If you were an old farmer yakking about it with other farmers over a game of dominoes as you pass around a jug of cider, it wouldn’t matter at all.
But, Neil, YOU are not ME! I could get away with such nonsense, but YOU CANNOT!
You pass yourself off as an authority in the LAW, a learned man, someone whose legal opinions people should heed. And yet you know that because courts rule against your quixotic idea of TILA rescission, anybody who propounds your delusional theory will LOSE, at the cost of many thousands of dollars in fees (his own and his adversaries’), and then will lose his house to foreclosure if he tried to rescind wrongfully, such as after 8 years or in the face of no TILA violation.
Here’s the shame of your method. You shamelessly promote your TILA Rescission Package for $3000 or thereabout. After reading your theory a person would have to be an idiot to pay 25 cents for it, much less three grand. Sadly, such idiots abound, I guess. Otherwise, why do you continue to promote the package.
Don’t you worry that someone might report you to the Florida Bar for knowingly violating competence, diligence, and candor requirements?
On 2018-02-14 08:25, Livinglies’s Weblog wrote:
Probably the main fallacy of the people who say that TILA Rescission is not possible or viable is that they project the outcome of a lawsuit to vacate rescission. Based upon their conjecture, they assume that Rescission is no more than a technicality. Congress, and SCOTUS beg to differ. It was enacted into law 50 years ago in an effort to prevent unscrupulous banks from screwing consumer borrowers.
Let us help you plan your TILA RESCISSION narrative and strategy: 202-838-6345. Ask for a Consult.
Register now for Neil Garfield’s Mastering Discovery and Evidence in Foreclosure Defense webinar.
Get a Consult and TEAR (Title & Encumbrances Analysis and & Report) 202-838-6345. The TEAR replaces and greatly enhances the former COTA (Chain of Title Analysis, including a one page summary of Title History and Gaps).
https://www.vcita.com/v/lendinglies to schedule CONSULT, leave message or make payments. It’s better than calling!
THIS ARTICLE IS NOT A LEGAL OPINION UPON WHICH YOU CAN RELY IN ANY INDIVIDUAL CASE. HIRE A LAWYER.
I keep getting emails from non lawyers who have a “legal opinion” that not only differs from mine, but also the opinion of hundreds of lawyers who represent the banks and servicers. They say that because disclosures were probably made that rescission is nothing more than a gimmick that will never succeed and they point to the many case decisions in which courts have ruled erroneously in favor of the banks despite a rescission that eliminated the subject matter jurisdiction of the court, since the loan contract, note and mortgage no longer exist. The debt, however, continues to exist even if it is unclear as to the identity of the party to whom it is owed.
First the courts ruled erroneously when they said that tender had to be made before rescission was effective. Then the courts said that no rescission could be effective without a court saying it was effective. That one put the burden on proving the figure to make proper disclosure on the homeowner. The Supreme Court of the United States, (SCOTUS — see Jesinoski v Countrywide) after thousands of decisions by trial and appellate courts, told them they were wrong. As of this date, no court has ever ruled that the rescission was vacated — the only thing that could stop it.
The lay naysayers keep harping on how wrong I am about rescission. Unfortunately many people believe what they read just because it is in writing. In my case I simply instruct the lawyers and homeowners to simply read the TILA Rescission statute and the unanimous SCOTUS decision in Jesinoski. What they will discover is that I am only repeating what they said — not making it up as some would have you believe.
To the naysayers and all persons in doubt, i say the following:As I have repeatedly said, in practice you are right, for the time being.But the legal decision from SCOTUS will undoubtedly change the practice. The law is obvious and clear. SCOTUS already said that. So no interpretation is required or even permissible. SCOTUS said that too. TILA Rescission is mainly a procedural statute, not a substantive one. SCOTUS said that too. On the issue of when rescission is effective, it is upon mailing (USPS) or delivery. SCOTUS said that too. On the issue of what else a borrower needs to do to make TILA rescission effective, the answer is nothing. SCOTUS said that too.
Hence the current argument that you keep making is true “in practice” but only for the moment. SCOTUS will soon issue another scathing attack on the presumptuous courts who defied its ruling in Jesinoski. There can be no doubt that SCOTUS will rule that any “interpretation” that contradicts the following will be void, for lack of jurisdiction, because the loan contract is canceled and the note and mortgage are void:
- No court may change the meaning of the words of the TILA Rescission statute.
- Rescission is law when it is mailed or delivered.
- Other than delivery no action is required by the borrower. That means the loan contract is canceled and the note and mortgage are void. They do not exist by operation of law.
- Rescission remains effective even in the absence of a pleading filed by the borrower to enforce it.
- Due process is required to vacate the rescission. That means pleading standing and that proper disclosure was made, an opportunity for the borrower to respond, and then proof that the pleader has standing and that proper disclosures were made.
- Pleading against the rescission must be filed within 20 days or it is waived.
- At the end of one year both parties waive any remedies. That means the borrower can no longer enforce the duties imposed on the debt holder and the debt holder may no longer claim repayment.
- The only claim for repayment that exists after rescission is via the TILA Rescission statute — not the note and mortgage. This is based upon the actual debt, not the loan contract or closing documents.
- Any claim for repayment after rescission is predicated on full compliance with the three duties imposed by statute.
- A court may — upon proper notice, pleading and hearing — change the order of creditor compliance with the three duties imposed upon the debt holder. This does not mean that the court can remove any of the duties of the debt holder nor summarily ignore the rescission without issuing an order — upon proper notice, pleading and proof — that the rescission is vacated because the proper disclosures were made or for any other valid legal reason that does not change the wording of the statute.
- The three duties, which may not be ignored, include payment of money to the borrower, satisfaction of the lien (so that the borrower might have an opportunity to refinance), and delivery of the original canceled note.
Virtually 100% of lawyers for the banks and servicers agree with the above. They have advised their clients to file a lawsuit challenging the TILA Rescission because such a lawsuit could be easily won and would serve as a deterrent to people attempting to use TILA rescission as a defense to collection or foreclosure efforts. Yet their clients have failed to follow legal advice because they know that they have no debt holder to whom funds can be traced. If they did identify the debt holder(s) they would be showing that they played just as fast and loose with investor money as they have done with the paperwork in foreclosures.
Does this mean a free house to homeowners? Maybe. Considering how many times the loans were sold directly and indirectly, and how many times the banks received insurance, bailout and purchases from the Federal Reserve, that wouldn’t be a bad result. But the truth is that everyone knows that won’t happen unless the courts continue their decisions with blinders on.
In the end, the homeowners do owe money to the investors whose money was used too fund the loans, directly and indirectly. Whether it is secured or not may depend upon state law, but as a practical matter very few borrowers would withhold their signature from a valid mortgage and note based upon economic reality.
Dear Neil Garfield:
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:
- The note holder or his agent has the right to enforce the note;
- The convolutions of robosigning and securitization have no bearing on the foreclosure process, especially when the note was endorsed in blank; and
- 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.