Violations of Truth In Lending Law
The Truth in Lending Law (hereinafter referred to as “TILA”) is usually violated by a lender failing to provide the appropriate disclosure to the homeowner at the time of closing. The financial institution must specifically disclose the annual percentage rate of the loan. In addition they must disclose the finance charges, the amount financed, the total payments, the payment schedule and many other items. These disclosures are supposed to be included in the document referred to as the Truth in Lending Disclosure Statement. The lender is responsible for all of the calculations contained in the Truth in Lending Disclosure Statement being accurate.
TILA and HOEPA Violations Apply To All Subsequent Banks
Who Will Receive Assignments From The Original Lender
The actual violations of TILA and the Home Ownership and Protection Law (hereinafter referred to as “HOEPA”) are caused by the original lender not complying with these statutes. Thereafter if the loan is assigned to subsequent financial institutions these lenders are held accountable for the violations of the original bank. The only way subsequent financial institutions can avoid liability under these statutes is if they can show a reasonable person exercising ordinary due diligence would not have been able to determine the violation or improper practice pursuant to TILA or HOEPA.
Rescinding the Loan
The method in which you rescind the loan is to give written notice to the lender you are exercising your right of rescission. If you are successful in your request to rescind the loan, the financial institution must return everything you paid to them except for the payments of the loan principle. In addition, you must return the portion of the loan principle that has not yet been repaid. When you rescind the loan you can eliminate being responsible for the payment of the loan under its terms but you still can’t keep the loan proceeds. The reality is when you rescind the loan you must refinance to repay the portion of the principal you received. However, rescission of a loan will always stop a foreclosure proceeding in its tracks!
It should be noted recently the United States Supreme Court rendered a decision in the matter of Jesinoski v. Countrywide Home Loans that you don’t have to sue within the three year rescission period for rescission. You only have to provide written notice to the lender to preserve all of your rights during that three year period.
Foreclosure Defense Lawyer
If you seek to hire a lawyer to represent you in a foreclosure defense, one of the things he or she should be familiar with are the regulations involving TILA and HOEPA. The lawyer should know how these laws can be asserted by you in a foreclosure proceeding as a defense and how you can obtain damages as a result of violations of these laws. An excellent publication which can provide you with more ideas concerning the fighting of foreclosure lawsuits is Foreclosures published by the National Consumer Law Center.
