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  1. #1
    Join Date
    Jul 2007
    Posts
    5

    Default TILA Violation as a Defense to Foreclosure

    My question involves a foreclosure in the State of:


    Hello,

    I own a house in CA which I bought 6 years ago. The lender had began foreclosure process against me. I intend to fight back and as a first step I performed a forensic mortgage audit report for my 1st and 2nd mortgage. This is a summary of the audit findings:

    1. The lender did not provide me a Truth in Lending (TIL) disclosure for either the first or second mortgage (line of credit) at the time of settlement. This is a violation of TILA and RESPA statutes. Lately, following my request to get a copy of the TIL, I received a letter from my lender confirming that the lender has been unable to locate a copy of the TIL.

    2.. The lender did not disclose the Annual Percentage Rate (APR) and Finance Charge to the borrower. This is an obvious and serious violation of TILA and RESPA statutes.

    3. An actual closing or settlement never took place. The documents were sent to the borrower who signed them, alone at home, without a notary or attorney present. The borrower mailed the signed documents back to the lender.

    4. Because an actual settlement never occurred, the borrower’s identification was never verified since the documents were mailed to the borrower and then mailed back to the lender. None of the documents was notarized.

    5. Copies of the signed documents were not provided to the borrower at the time of settlement.

    My questions:
    * Based on these audit findings, what are my options? Is the above a good basis to fight back?

    * I read that discovery of a TILA violation must occur within three years, and any violation results in the lender being forced to cancel the deed of trust against the property, which makes a lender's right to foreclose evaporate. And, discovery of a TILA violation within a year of signing the loan documents, might be able to recover damages in a lawsuit.

    Since I did not get the TIL 6 years ago when I bought the house I was not aware of this. What is my option here? Did I miss the train in this case or is there a special case for people that did not get the TIL?

  2. #2
    Join Date
    Sep 2005
    Location
    Behind a Desk
    Posts
    98,846

    Default Re: TILA Violation as a Defense to Foreclosure

    The right of rescission is set forth by statute.
    Quote Quoting 15 USC Sec. 1635(f). Right of rescission as to certain transactions
    (f) Time limit for exercise of right
    An obligor’s right of rescission shall expire three years after the date of consummation of the transaction or upon the sale of the property, whichever occurs first, notwithstanding the fact that the information and forms required under this section or any other disclosures required under this part have not been delivered to the obligor, except that if
    (1) any agency empowered to enforce the provisions of this subchapter institutes a proceeding to enforce the provisions of this section within three years after the date of consummation of the transaction,

    (2) such agency finds a violation of this section, and

    (3) the obligor’s right to rescind is based in whole or in part on any matter involved in such proceeding, then the obligor’s right of rescission shall expire three years after the date of consummation of the transaction or upon the earlier sale of the property, or upon the expiration of one year following the conclusion of the proceeding, or any judicial review or period for judicial review thereof, whichever is later.

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