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Law Educator, Esq.
Law Educator, Esq., Lawyer
Category: Real Estate Law
Satisfied Customers: 116817
Experience:  Licensed attorney practicing landlord-tenant, land use and other real estate law and litigation.
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Customer Question

I FILED A TILA REG Z RECISSION AFTER FINDING FRAUD IN A LOAN TRANSACTION ON PROPERTY I inherited from my deceased sister who was incompetent to enter into a HECM loan leaving me off title by accident. My sister had Dementia Aneurism and in a nursing home when she was pressured into the loan the property was worth only 180K and she was tricked into signing a 453K loan that was table funded sold to Ginnie Mae. Bank of America is the servicer and filed foreclosure on the loan. I am living in our family home for 16 years. I heard about TILA REG Z and filed a claim that was unanswered. I understand there is a Supreme Court Decision that makes the Recission of the loan a matter of law if not opposed by the servicer within 20 days. There was no response. after 2 months. Is the loan VOID as a matter of law as I have been told?
Submitted: 2 years ago.
Category: Real Estate Law
Expert:  Law Educator, Esq. replied 2 years ago.
Thank you for your question. I look forward to working with you to provide you the information you are seeking for educational purposes only.
That sounds like this is not only fraud, but financial abuse of the elderly and possibly a predatory loan, so you have basis to challenge the loan and sue the lender based on what you are saying if they do respond to your rescission notice.
However, the US Supreme Court has recently made rescission a bit easier. The Supreme Court held that sending a rescission notice alone (within the three year period) was sufficient for a borrower to exercise their extended three year right of rescission. This decision broker the strong weight in the federal courts which had for years and in so many courts, required a lawsuit to be filed. “The law provides that a borrower “shall have the right to rescind . . . by notifying the creditor, in accordance with regulations of the Board, of his intention to do so” …..the language leaves no doubt that rescission is effected when the borrower notifies the creditor of his intention to rescind. It follows that, so long as the borrower notifies within three years after the transaction is consummated, his rescission is timely. The statute does not also require him to sue within three years. See: Jesinoski v. Countrywide Home Loans, Inc.,***** 790 (2015).
So the loan is indeed void as a matter of law if you send the rescission within the 3 years and they failed to respond in the 20 days.

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