How Do You Rescind Your Mortgage Under The Truth-In-Lending Act
August 31, 2008
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:
- 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.
- 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.
- 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.
- The right only applies to transactions secured by your principal home. Those secured by vacation homes or second homes are not included.
- 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.
- The loan must have been issued to a consumer.
- The right does not apply to loan amounts greater than $25,000 and not secured by your primary home.
- 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.
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