The previous entries detailed a consumer’s right to rescind a loan under TILA, as well as the details and conditions wherein one can use the that right. Now we shall discuss the actual process of rescission:

1. You must send a written notice of rescission to your creditor. Within 20 calendar days upon receiving it, they must return any money or property collected from you with regards to this transaction, as well as perform the necessary steps for the rescission itself. In the meantime, you may retain ownership of any money or property given to you by your creditor, until they accomplish their obligations.
2. After your creditor has complied with item 1, you must tender the money or property to them. If this is not possible, then you must tender its reasonable value.
3. If for some reason your creditor does not collect the money or property within 20 calendar days, you may keep it without any further obligation.

There are, however, some things to keep in mind when exercising your right to rescind a loan.

1. The right only applies to transactions secured by your principal home. Those secured by vacation homes or second homes are not included.
2. The TILA does not apply to business, commercial and agricultural loans. Neither does it apply to public utility credit, home fuel budget plans, and some student loans. It must be for personal, household, or family purposes only.
3. The loan must have been issued to a consumer.
4. The right does not apply to loan amounts greater than $25,000 and not secured by your primary home.
5. Even if you properly rescind the loan, the mortgage company is still the holder of a secured claim on the property.  In order to release that claim, you will need to bring an action to force the acceptance of the tender amount.  Without legal action, the security interest continues.

Stopping foreclosure using the TILA requires knowledge of the many rules and technicalities involved. If you feel your creditor has not been upfront or accurate with the details of your loan, go over them with an experienced foreclosure lawyer well-versed on the TILA. You may find you have just rescued your own home.

You can fight a foreclosure within the time period set by law (usually 20 days after you were personally served with the foreclosure Complaint, 30 days if you were served by mail or other means). Once that time has passed, you are legally in default and your time to answer has expired.

This is not, however, the end of the world. If your time to answer has expired, you will need to get the court’s permission to file and serve a late answer. Many courts will allow you to do so if you have a good defense in the case, as well as a good reason why you didn’t file an answer in a timely manner. It’s also smart to call the bank’s lawyer to get their consent, in which case you wouldn’t need to get the court’s permission at all - but if they don’t consent, letting the court know in your request will show that you’ve done your best to solve the problem on your own.

If you are served with a foreclosure and file for bankruptcy during the time to answer, then that time clock stops running while you’re in bankruptcy. So if you’re served with the Complaint and then file for bankruptcy on Day Ten, you will still have at least ten days to file an Answer once the bankruptcy ends (or if the bank gets relief from the automatic stay).

According to a recent New York Daily News article, thousands of city renters being forced from their homes when the owner of the property falls into foreclosure. In fact, a recent study released by the New York University Furman Center for Real Estate and Urban Policy found that Brooklyn had the most renters affected by the mortgage crisis in the city last year. More than 7,000 residents lost their apartments in foreclosed Brooklyn homes last year, compared with 3,723 in Queens, 2,483 in the Bronx, 1,111 in Manhattan and 488 on Staten Island.

As these homes are taken back by the lenders or purchased by new owners, renters are kicked to the curb.  Many had no idea their landlords weren’t paying the mortgages, so the news is a surprise.

When a bank forecloses on a landlord, the tenant has no guarantee of being allowed to stay in the property. In addition, neither the bank nor the landlord has any legal obligation to inform the tenant of the foreclosure. The renter first learns of the foreclosure when he or she is told to pack up and move out.

If the renter does not go peacefully, he or she faces an eviction proceeding in landlord-tenant court.  That can involve time lost from work or other obligations, legal fees, and sleepless nights.

Some lenders, mindful of the fact that renters can drag the process along for months, offer “key money” to help a renter move quickly.  Though some renters avail themselves of this offer, others cannot do so.  Their security deposits are gone, they have been paying rent faithfully rather than saving money for the move, and are left with few choices and not much time to make them.

Reuters it reporting on the recent phenomenon of “walking away.” It’s what happens when you just pack up and leave the house before the foreclosure is finished. Increasing numbers of Americans are simply walking away from their houses and mortgages.

Reuters claims that rapid house price falls in many parts of the United States will soon leave as many as one in five borrowers owing more on their loan than the house will fetch, removing at a stroke the single most powerful incentive to keep up with payments.

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