Foreclosure Headlines

Today a Federal Judge in South Florida granted motions to dismiss (with prejudice) filed by parties against whom a homeowner had filed suit claiming that those parties should be enjoined from using the notes and mortgages in his case. The claim was based upon allegations of a recent TILA rescission and that consummation of the loan contract was a question of fact. I am the attorney of record. No decisions have been made by the client as to the next steps of Rehearing and/or Appeal.

This decision underscores what I have been saying for months as judges across the country continue to resist the idea that rescission actually cancels the loan contract and voids the note and mortgage regardless of when or why it is sent. The various conditions for rescission are (a) questions of fact that should not be presumed and (b) can only be raised by a party who has legal standing without reference to the note and mortgage. The court in this case disagreed. Based upon what we are seeing across the country, most trial courts are looking at TILA rescission the same way. AND that means that relief will only come on appeal in most cases.

So the conclusion to be reached here is that those lawyers who reject this strategy are right most probably in a trial court. Whether they are right when we get to the appellate level is another story --- but, as I have repeatedly said over the last ten years, the trial judges don't like TILA and they hate TILA Rescission. It took about 10 years for the Jesinoski case to ripen into a decision favorable to borrowers. Trial judges are still resisting the direct instruction from the Supreme Court.

Even where rescissions are sent within the three years (starting from the date of signing, not necessarily the date of consummation), Judges are continuing to ignore TILA rescissions or enter orders that deny the homeowner's claim for relief based upon a valid, legal rescission. Even though the statute specifically provides how rescission becomes effective and when, courts don't like it and are refusing to use it even after Jesinoski v Countrywide was decided by SCOTUS.

So the long and short of this, for now, is that I want to repeat with emphasis that rescission ought to be the simple remedy that Congress passed in a very clear procedural administration of the disclosure requirements, but it still appears that the courts and the banks are going to make it as tough as they did before the Jesinoski decision.

My opinion remains the same as 10 years ago when I first looked at TILA rescission. This was meant to level the playing field. If Judges were not so intent on reading in "facts" and "law" into the TILA rescission statute, this remedy would have been extraordinarily effective at eliminating or curtailing the number of foreclosure sales. In the end, as I predicted ten years before when everyone was saying that my "theory" about rescission was completely wrong, my opinion will most likely be upheld --- AGAIN.

This is why each case must be carefully reviewed with a report that details the possible strategies and likely outcomes at the trial level, at the appellate level and ultimately at the highest level of the court system. TILA Rescission was obviously intended to be a "magic bullet" to force compliance with lending disclosures on the banks. The law did not fail. It is clear on its face. But Courts are clearly resistant to entering an order that could put other mortgage loans in doubt.  Neil Garfield

Inflation News

Fed Watch: State of Play

Servant Admin
State of Play : We are heading into the March FOMC meeting next week. The recessionistas are on the sidelines, waiting for data to turn in their favor. I suspect they have a long wait. In the meantime, FOMC participants will hone their arguments as they prepare for what is likely to be a contentious meeting. At stake is not a decision of rates; they will hold steady. At stake is a decision on the balance of risks. Do they want to send a dovish, neutral, or hawkish signal for the April and...Read More...

Recent Foreclosure Headlines

Today a Federal Judge in South Florida granted motions to dismiss (with prejudice) filed by parties against whom a homeowner had filed suit claiming that those parties should be enjoined from using the notes and mortgages in his case. The claim was based upon allegations of a recent TILA rescission and that consummation of the loan contract was a question of fact. I am the attorney of record. No decisions have been made by the client as to the next steps of Rehearing and/or Appeal. This...Read More...
The OCC Interpretive Letter #1016 (attached) supports our determination that the Step Transaction and Single Transaction Doctrine applies to the alleged mortgage and securitization transactions... Consider the following: Office of the Comptroller of the Currency Interpretive Letter #1016 (February 2005) available on the following government website: http://www.occ.gov/static/interpretations-and-precedents/feb05/int1016.pdf states, among other things: "[I]n no sense, under the facts...Read More...
If Paul Revere were alive today he would be riding through the town warning “The REMICs have failed!” However, the government these days would go, “Shhhhhh!” Most average homeowners have no idea what a REMIC is – actually most attorneys have no clue …. so, you know many of the Judges are completely in the dark. REMICs are a form of IRS tax shelter sold to investors as part of the mortgage-backed securities package (Real Estate Mortgage Investment Conduit (“REMIC”) pursuant to I.R.C.Read More...
Wells Fargo Bank has agreed to pay the US government $1.2bn for improper mortgage lending practices. As per the settlement, Wells Fargo admits, acknowledges, and accepts responsibility for having from 2001 to 2008 falsely certified that several of its home loans qualified for Federal Housing Administration insurance. The bank also admitted that it did not disclose thousands of faulty mortgage loans to the Department of Housing and Urban Development (HUD). Between 2002 and October 2005, the...Read More...
Last Reply By Paul DeCourcey · First Unread Post
The entire foreclosure mess can be summed up in one word: PRESUMPTIONS. Under the rules of evidence certain documents are presumed to be true and valid. The "Holder" of a negotiable instrument is often presumed to own it and have the right to enforce it. If the instrument is a promissory note, then it is presumed that the note is evidence of a valid debt. It is through this vehicle, that the banks and servicers have successfully conducted millions of foreclosures. *The problem, as most...Read More...

Open Topics

Here's an interesting term/definition I found whilst perusing Black's Law Dictionary:

RECTIFICATION OF REGISTER.  The process by which a person whose name is wrongly entered on (or omitted from) a register may compel the keeper of the register to remove (or enter) his name.  - Black's Law Dictionary, 4th Edition

Black's gives the reference for this as "Sweet.", which indexes to:

Sweet's Law Dictionary;--Sweet on the Limited Liability Act;--Sweet's Marriage Settlement Cases;--Sweet's Precedents in Conveyancing;--Sweet on Wills.

Perhaps if there's interest someone can do some additional sleuthing to find the above referenced dictionary.  I tried a Google Books search but came up empty, at least within the first page of results.