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  1. #1

    Default TILA Rescission Rights

    My question involves real estate located in the State of: Texas

    We did a modification/renewal/extension of a balloon note with our bank on October 31, 2008. We mailed them immediately in to our bank upon receipt but never received a copy back. We found out this month that they applied our first payment to November instead of December and we are a month behind but because I sent my payments in early every month we were within the 30 days, for every month but December (it arrived on the day the payment was due January 9, 2009) so they marked us 30 days late for December. I requested a copy of the loan documents only to be told my husband was the only one who could request the documents, even though I had signed every document. When we received them, our mortgage broker who is working on our refinance noted they had back dated the loan to October 9, 2009, made the first payment due November 9, 2009 even though we did not have the loan papers until October 30 and they did not notarize them until November 10, 2008. The second thing he noticed was that I was on every loan document but the Truth in Lending Statement, I was not asked to sign that document. We also never received any disclosures about our rights to rescission, does that apply here and what recourse could we have?

  2. #2
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    Default Re: TILA Rescission Rights

    If a payment was due in November, and you didn't make the payment, then it's typical for them to apply the "next month's" payment to the period you missed.

    The benefit of rescission to you would be what? Rescission is the undoing of the contract and the restoring of the parties to their original position. You're prepared to return their money?

  3. #3

    Default Re: TILA Rescission Rights

    Actually under Federal Laws according to my attorney by not disclosing the our recission rights that they violated the Truth in Lending Act and can be fined thousands of dollars plus any interest they collected. Thank you for your answer but our real estate attorney has answered them for us.

  4. #4
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    Default Re: TILA Rescission Rights

    You didn't answer the question. If your real estate lawyer didn't help you figure out how you would finance a rescission, that is something you need to discuss with him. See 12 CFR § 226.23(d)(3).

    In short, the process of rescission under TILA is set forth by statute and regulation, and is meant to restore the status quo ante - to put the parties in the positions they were in before the transaction. If a lender faila to provide the borrower with a notice of right to cancel, as well as all "material disclosures" relating to the loan, TILA permits a consumer may rescind a loan for up to three years after consummation of the transaction. When a consumer exercises the right to rescind, the lender’s security interest in the real property becomes void and the consumer will not be liable for most, if not all charges, including any finance charge. Within 20 days after the borrower’s notice of intent to rescind, the creditor must return any money or property given to anyone in connection with the transaction and must reflect the termination of the security interest. That's the easy part.

    Here's what can be the hard part for the consumer seeking rescission: When the creditor has complied with those obligations, the consumer must repay the loan proceeds to the creditor. Do you understand now why I asked if you're prepared to return the money?

    Incidentally, when you say "that I was on every loan document but the Truth in Lending Statement, I was not asked to sign that document" do you mean to say that you did receive a copy, but that as you didn't sign it you believe you can successfully claim you did not receive it?

  5. #5

    Default Re: TILA Rescission Rights

    We never received any information about recission or were given any papers to sign. The paperwork was incorrectly filed, dated, and was a modification/renewal/extension of a previous loan. We are already in the process of refinancing and have already been told by the Comptroller and our Texas attorney that we need to file against the bank.

    One other thing, no I was not asked to sign the Truth in Lending Statement. Only my husband's name was on that one document and they only had him sign.

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