Kentucky mortgage companies are subject to the Truth in Lending “TILA” requirements. If a lender fails to issue the notice of your three day right of rescission it may have to actually give back money to the borrower. You don’t have to sue to exercise your three day right of rescission but you do have to send the letter. That is what the Supreme Court decision said in Jesinoski v. Countrywide Home Loans. This is about two major Kentucky foreclosure defenses TILA, RESPA. For information about how TILA and RESPA integrate check out the CFPB bulletin.
The 3 Day and 3 Year Right to Rescind under Truth in Lending
You have an absolute right to rescind for three days under the code but you also have up to 3 years to advise the lender that you did not get your legally required notice. Many lenders say that this is often used against them to force better terms under a foreclosure. TILA the Truth in Lending Act, 15 U.S.C. §1601-1677 requires lenders to disclose rights and required information in the mortgage closing documentation. This includes the APR rate, costs, and other material information.
You have an absolute right to rescind for any reason for three days after closing, until the disclosures are made or up to three years after the transaction. The borrower only has to give notice to the mortgage company of the right to rescind.
The Kentucky and Supreme Court Truth in Lending Act
The Supreme Court case stated you didn’t have to file the lawsuit within those 3 years. But you did have to send written notice. When the Jesinoskis sued 4.5 years later they asked for damages from Countrywide for the failure to provide the notices.
Every Federal Circuit Court, the Consumer Financial Protection Bureau, and the Supreme Court now agree written notice is all that is required. What this means is that when loans are transferred and these documents are lost the lenders cannot effectively sue to collect.
There are over 64 separate defenses at least to a foreclosure. When you properly outline and sue the mortgage company back you can often force the lender to be more reasonable. Either give the homeowner terms that are reasonable or face years in litigation. One time this lasted over 15 years in our office.
Other Kentucky Foreclosure Defenses TILA & RESPA Real Estate Settlement Procedures Act
Inadequate disclosures are just one common mistake the lenders make in the rush to close a home loan under TILA. All fees, costs, interest rates, and charges for the financing and closing must be clearly disclosed. The down payment, payment amount, financing charges, terms of repayment, and payment period have specific definitions that must be accurately set forth in the closing documents. It isn’t enough to be accurate you have to be timely as well.
Respa also makes it illegal to fail to:
1. disclose better financing options,
2. disclose kickbacks
3. provide information bulletins within 3 days of the mortgage application
4. provide a good faith estimate of the closing costs or
5. provide a closing statement 24 hours prior to the closing.
If you have a foreclosure see us about your defenses to a foreclosure. You may need to sue the lender back or you may need to file a bankruptcy. We have been handling these cases for over 30 years. We are happy to talk about your options.