What To Do After You’ve Rescinded Your LoanPosted on November 9, 2015 by
Let’s say you’re behind on your mortgage and the bank has filed foreclosure. You look into it a little bit and you see that your loan was securitized and sold as part of a big bundle and has been traded around the banking industry for the last 5 years like almost every other mortgage out there. You decide you’re going to take action and, using the rules established in the Truth in Lending Act (TILA), you send a notice of rescission to the bank and anyone who might try to claim ownership of your loan. The 20 days have passed and all the bank has done is sent you a letter saying they’re not going to honor the rescission. If you’ve been reading my previous articles you know that holds no water, and that by operation of law your note and mortgage are void. You can now be expecting the bank to return your canceled note, remove it from the property records, and return all of the money you ever paid on the loan, right? Wrong. You still have more work to do.
While the Supreme Court has given homeowners some power back against the banks with the January’s Jesinoski ruling, the chances are you will still need to take the bank to court to enforce the rescission. You’re going to want to move quickly because after one year from the rescission, you lose all right to the money that you paid the bank for the loan. The mortgage is still void, but you’re never going to get your money back. On the flip side, after a year the bank can no longer collect any of the money that you received with the loan.
Once the 20 days have passed and you have filed suit against the bank to force them to comply with the rescission, they are going to use whatever tactic they can to get the judge to vacate the rescission. The banks are going to argue that they have standing to contest the rescission based on the note and mortgage. The problem for the banks, and what you might have to explain to a judge, is that the note and mortgage no longer exist. A claim of standing based on the note and mortgage must be denied.
The reason the banks are using this strategy of ignoring the rescission and then making baseless claims of standing using void notes and mortgages is simple. They cannot prove who the creditor was on any of these loans. In order to prove standing, they must be able to clearly show who provided the money for a loan, and all of the subsequent sales and assignments of that loan. Even if the judge bends over backwards to help the banks, as judges have been known to do, they will get overturned on appeal unless they can clearly prove who the creditor is on the loan.
Fortunately, the law has caught up to the banks and the Supreme Court has ruled as clearly as possible in the homeowners favor. Not only has TILA rescission provided homeowners with a powerful tool to stop foreclosure and stay in their house longer, it also creates an opportunity for investors to do some pretty amazing deals. The tides have turned and the banks are being forced to negotiate on our terms. No more begging the banks to accept our short sale and REO offers only to have them demand ridiculously high prices. We can now get the banks to the table and demand that they prove they have the right to enforce a loan.
This makes it more important than ever that homeowners and real estate investors act NOW. This is a massive opportunity for real estate investors. If you know of anyone with a defaulted or underwater note, you need to get in contact with my office immediately at (706)-485-0162. I have spent the last two years building up a team of experienced attorneys and fraud examiners/forensic auditors who specialize in exposing fraud committed in the mortgage process and using that fraud as leverage to negotiate the sale of notes. This opportunity is not going to be available forever; we need to strike while the iron is hot!
We have a huge opportunity to help homeowners and do some great deals with multiple exit strategies. For more information, call me at 706-485-0162.