I need to stop my house from foreclosure in Tennessee- can I rescind my loan? What is a mortgage rescission in Tennessee? Does the new United States Supreme Court Truth in Lending Act (TILA) ruling effect my Tennessee foreclosure sale? What happens if I send a rescission letter to my servicer/lender in Tennessee? Will this stop the foreclosure? As a Tennessee foreclosure lawyer/Tennessee foreclosure defense lawyer I can tell you that all cases concerning rescission are experimental at this point. I can also say up front that writing a letter to your lender rescinding your loan will not stop the foreclosure by itself. If you have received a foreclosure notice in Tennessee, you will still need to take action as you will still have to follow Tennessee foreclosure law.
I get a lot of inquiries stating “what happens if I send a letter to my lender exercising my right to rescind my loan under the Truth in Lending Act (TILA)?” There has been a lot of buzz on the internet about a recent Supreme Court Ruling and people who are facing foreclosure in Tennessee want to know if this case will help their cause. I am constantly emailed by people who keep up with the rescission issue online and they become convinced that they know what will and what will not work.
The good news is that it is true- there was a recent ruling made by the Supreme Court of the United States. The Supreme Court of the United States recently held that a borrower can exercise its right to rescind a loan under the federal Truth in Lending Act (“TILA”) by providing written notice to the lender. In doing so, the Supreme Court reversed the Court of Appeals for the Eighth Circuit’s affirmation of the District Court of Minnesota’s decision, which had held that a borrower must file a lawsuit within three years of the consummation of the loan to exercise his/her rescission rights.
In Jesinoski v. Countrywide Home Loans, Inc., the Supreme Court of the United States considered “whether a borrower exercises this right by providing written notice to his lender, or whether he must also file a lawsuit before the 3-year period elapses.” Jesinoski v.Countrywide Home Loans, Inc., No. 13-684, 574 U.S. (2015).
The Supreme Court disagreed with the District Court and the Eighth Circuit, holding that “Section 1635(a) explains in unequivocal terms how the right to rescind is to be exercised: It provides that a borrower ‘shall have the right to rescind…by notifying the creditor’…of his intention to do so’ (emphasis added). The language leaves no doubt that rescission is effected when the borrower notifies the creditor of his intention to rescind.” The Supreme Court further declared that the “statute does not also require him to sue within three years.”
There is some technical information that I have not included in this blog that is crucial to having any success in these types of lawsuits. You should not rely on this blog if you are trying to act against the bank without a lawyer. Simply trying to send out a letter alone will not work- there is more to it. Hopefully I don’t have to remind anyone reading this blog that the banks paid billions of dollars in fines to stop engaging in wrongful foreclosures, and they still continue to do so. Along those same lines, to think that because you write a letter asking for them to rescind your loan and stop the Tennessee foreclosure and they will simply “honor and obey” is naïve. There is a way to file a rescission lawsuit to enforce the new Supreme Court ruling. As rescission lawsuits are still in their infancy there is no law in Tennessee about how this ruling will be applied. You do not want to go against the bank in Court alone, lose on procedure, and establish terrible case law for others in the future. Please don’t do this! If you have questions about this or any other issues I am a Tennessee foreclosure lawyer and I am here to help.
Reminder–It is important that you try to avoid taking this type of lawsuit into your own hands or without first consulting a lawyer. There are a lot of “vultures” out there and “non- lawyers” preying on homeowners. I have recently had many “non-lawyers” calling me “on behalf of” homeowners basically asking my advice on how to draft a lawsuit. Practicing law without a license is a crime so be very leery of anyone who claims that they are “non-lawyers” who can help. This includes offers to do securitization and loan audits. There are a lot of people trying to con you at one of the most stressful times in anyone’s life. It is important to put forward your best defense so contact a lawyer first.