i don’t know what a TILA is either. the only document I signed was the application and that was it.

well until i got to closing then i had hundreds of pages to sign.

It’s a strange thing that happens when people blame the victim. It almost always stems from a lack of understanding of the full situation. Allow me to educate you a bit.

TILA violations have been so rampant these last few years that they were almost ubiquitous. Do you know what TILA is? If you don’t, you’re not alone. Many attorneys do not know what TILA is or even know how to enforce it. In fact, even our possible president-to-be Obama is clearly ignorant of TILA’s existence—as evidenced on his website that he’d put in place protections and stricter disclosures. Guess what? That what TILA is!

So, you have lay people signing documents that are based on laws that even lawyers don’t understand, haven’t read or don’t know exist. What they are signing can only be fully understood by an understanding of what the documents are supposed to be based on. If you don’t know what that is, then you aren’t making an informed decision.

And guess what? That’s nearly all of us.

I’m saying that the snafu for most people is trying to get another loan. Even if people can rescind due to a TILA violation, it is becoming increasingly difficult to get another loan. Nearly impossible if you’ve filed Ch7 or Ch13.

But Chapter 13 creates a payment plan. If the leftover mortgage becomes unsecured–detached from the property–it can then be made a part of the payment plan. It solves the problem of getting a new loan.

Excuse the wording–I was hoping this would go to Moe before it posted–I thought that there might be an intermediary in the process.

what the hell are you saying here you lost me with the wording in your letter..

anyways : what your trying to say that it would be better for everyone to file bankruptcy (Cahpter13) have the debt removed/paid and you still keep you house & make payments interest free?

Is there a way that I can contact you privately without posting on the site.

I have been asking certain questions to people and am very interested in helping people like the obligors who have posted on your site. You can’t believe how many people or in this situation.

I’ll send you something I’ve sent to my attorney. I am trying to research a way to help people who have filed Chapter 13 and am working with a bankruptcy attorney who would like to use TILA for his clients. He’s says 100% of them filed to save their homes.

Here it is:

Hi Matt,

Okay, I got some answers to some questions I had–not all of the ones I posited to you but others.

Since my current mortgage/lien holder (Select Portfolio) has to assume all liability, then the loan wouldn’t revert to New Century but to the loan holder before that (Homestar–not sure if they’re still around).

So, there are a few questions that still need to be answered–however, no one seems to really know the answers.

1) Who owns the loan once it’s rescinded?

According to information I’ve found, some have stated that the current mortgagor must be paid back in money or property–only after, however, all monies have been returned. They have 20 days to return the all funds paid in associated with the loan (and according to some, attorney’s fees as well). I would assume that damages of $2000 a violation (per the fed court) would also have to be factored in.

Others say that the loan is gone like it never existed and reverts back to the loan the obligor had before the current loan had been enacted. Now, since the old lender has been paid off, it appears that procedurally the obligor owes the current creditor, less the paid in amounts, interest, loan fees, etc. But technically, the loan reverts back to the old lender. So, who owns the loan?

If the rescinded loan becomes unsecured debt, which is does, then it can be discharged in bankruptcy.

Or, the loan could go back to the old lender who would then have to pay back the money. I think that they would loathe to do that.

So, it’s possible to have both lenders going at each other like piranhas until the water clears. That would be an interesting case, indeed. But I think that it would take years.

Here’s TILA:
(b) Return of money or property following rescission

When an obligor exercises his right to rescind under subsection (a) of this section, he is not liable for any finance or other charge, and any security interest given by the obligor, including any such interest arising by operation of law, becomes void upon such a rescission. Within 20 days after receipt of a notice of rescission, the creditor shall return to the obligor any money or property given as earnest money, downpayment, or otherwise, and shall take any action necessary or appropriate to reflect the termination of any security interest created under the transaction. If the creditor has delivered any property to the obligor, the obligor may retain possession of it. Upon the performance of the creditor?s obligations under this section, the obligor shall tender the property to the creditor, except that if return of the property in kind would be impracticable or inequitable, the obligor shall tender its reasonable value. Tender shall be made at the location of the property or at the residence of the obligor, at the option of the obligor. If the creditor does not take possession of the property within 20 days after tender by the obligor, ownership of the property vests in the obligor without obligation on his part to pay for it. The procedures prescribed by this subsection shall apply except when otherwise ordered by a court.********************************

I think that the key sentence here is “Upon the performance of the creditor?s obligations under this section, the obligor shall tender the property to the creditor, except that if return of the property in kind would be impracticable or inequitable, the obligor shall tender its reasonable value.”

Since I’m in bankruptcy, it would be impractical & inequitable to tender the whole value. ‘Reasonable’ value comes into play–which can mean 10 cents on the dollar or not, depending on the dischargeability of the debt.

I think that there is also some ambiguity about –”If the creditor does not take possession of the property within 20 days after tender by the obligor, ownership of the property vests in the obligor without obligation on his part to pay for it.”

I believe that there is a case to be made that if the creditor does not give back all the money or at least provide a payoff notice deducting all monies associated with the loan, 20 days after deadline of the notice of rescission (which is 20 days) –”ownership of the property vests in the obligor without obligation on his part to pay for it.”

I do think that this clause can be interpreted that way, as, shall we say an ‘incentive’ for the creditor to not drag their feet and actually complete the rescission request. You have to wonder what the original intent behind that clause was—what would it be if not a severe penalty (losing loan and collateral) to the creditor for lack of action on the matter.

I also believe that for each and every request for rescission that is not implemented, there are damages of $2000 (as per fed court) a pop. So every 20 days a obligor can request rescission and rack up damages if there is no answer–each with accompanying attorney’s fees.

2) What happens when the bankruptcy debt discharge limit has been exceeded?

What happens to the debt to be discharged when it is over the limit? Or cumulatively over limit? That’s why I think the damages play a part here–the more TILA/RESPA et al violations, the more can be argued to be removed from the loan as the damages accrue–to the tune of $2000 a violation in fed court.

3) What are the time limits to respond to a creditor’s hearing? Can a creditor request extra time after the fact–even after being properly notified of a bankrupt obligor?

This is a crucial question as it will determine **when** to rescind a loan. If the creditor does not show up at the creditor’s hearing, there is a case to be made that any subsequent ‘objections’ are untimely. Imagine the can of worms a bankruptcy judge will open if they start extending creditor objections. I don’t know if that happens often, but I don’t think the bankruptcy trustees would be too keen on it.

So, if a bankrupt mortgagor had TILA violations, and rescinded after the creditor’s hearing there’s not a lot the creditor could do, I think, if they didn’t show to the hearing.

The IRS always seems to be there, so especially in this market, it seems plausible that the mortgagor should be, too.

My situation in bankruptcy dictates what I personally can do, but there are lots of alternatives for other obligors. If they don’t want to declare bankruptcy, then go the TILA violation route. If they are in bankruptcy, wait til after the creditor’s hearing (if the mortgagor is within the 3 year timeframe) and rescind. After 20-30 days, discharge the loan through the bankruptcy. This should even work with Chapter 7, though Ch 7 won’t stop the foreclosure, the rescission should.

After more research, I believe the best way to go is to do operate within the parameters of the bankruptcy court. There are stricter guidelines for timeliness and it’s less likely to drag on for years. Also, the creditor’s are a bit hobbled by the constraints of a bankruptcy court–less likely for nasty procedural tactics to be used as a defense strategy.

I’d like to have these questions answered, but here’s how I’d like to proceed.

a) I want to rescind the loan through certified mail. I’d also like a copy faxed from the law office.

b) I want to have removed immediately any portion of the SPS loan from the plan payments

c) If a trust account is deemed necessary, I want it based on the new loan total or what I would be paying at that total with the previous lender (I have the paperwork).

d) I want to notify the bk court that I’ve rescinded the loan.

Please let me know your thoughts–I’d like to move on this no later than mid-week next week. I’d do it tomorrow, actually.

Thanks for reading,

Lisa

After I wrote that, I thought of something else:

Just thought of something else—-

When one files a chapter 13, the trustee puts you on a payment plan. Interest and penalties stop accruing and the debt is paid off or at least a percentage of it is.

I believe that would pertain to the ‘unsecured’ mortgage debt after rescission in a bankruptcy. So, even if the debtor paid at 100%, the payments would be spread out in 60 payments and NO interest and NO penalties.

That’s seems to me to be just as good! Who needs a new loan if you can make the payments interest free thru Chapter 13?

Just throwing around some ideas…

Lisa

Moe, I’d love to get your feedback on this.

hmmm oh yeah all those rich f^^^ers who took advantage of the working class.

wake up and smell the reality this will just be another property in the banks foreclosure and will probably be vacant for years because they didn’t want to help the original homeowner.

I say F^^K the banks if they do not want to help people.

another blogger stated they should just live there mtg free until they are kicked out. AND I’ll add to take the blinds you paid for, the fans, the lighting the crown molding, the drapes, the flooring, the appliances that you paid for and have the bank pay for them since the bank wants to keep your house they can have it in the same state you purchased it, since the market keeps crashing & property values keep dropping due to the # of foreclosures in peoples neighborhoods.

yes i love my home, & that is why I am trying to negotiate a loan mod …

have a wonderful evening ! & i want the Lakers to win also.
even though you keep kicking me while I am down no prob…
if you were the one going through the hardship I wouldn’t be kicking you I’d be offering my hand to help you up !

. . .

There are so many things that have caused us to get to this place, the Bush admin, the greedy banks (CountryWide for one), the Realtors, the Loan Officers, the Mortgage Brokers, the Title companies, the Appraisals, it was all a chain, those that looked the other way & knew they were doing wrong will pay sooner or later -

YOU HAVE GOT TO BE KIDDING ME! You forgot to blame the butcher, the baker and the candlestick maker.

For Chirst’s sake, was the home worth the price you negotiated? Do you still like your home that you live in?

If yes, make the payments. If no, move so someone else can make some payments.

We’re a Loan Modification Co. we have an attorney that is involved in all the legal aspects of the modifications we work on. We’re very good and have done well for our clients. Now, bar that we have a situation where we can’t do a modification for a client but we negotiate with her lender for a short sale and then put her into another house. This is the situation I was thinking about for you Christina. Hopefully this gives you an idea or give us a call 866-876-1400 ask for Johnny Loss Mitigation Dept.