About five months after the loan servicer rejected the Borrowers' demand for rescission -- and over three years after the loan transaction -- the Borrowers filed suit against the Loan Owner, the substitute trustee, and the servicer (collectively, "Defendants"), seeking, among other things, to enjoin the mortgage foreclosure sale and to rescind the loan. The original lender was not a party to the lawsuit.
In addition, TILA's implementing Regulation Z provides in part that "[t]o exercise the right to rescind, the consumer shall notify the creditor of the rescission by mail, telegram or other means of written communication. Notice is considered given when mailed, when filed for telegraphic transmission or, if sent by other means, when delivered to the creditor's designated place of business." 12 C.F.R. § 1026.23(a)(2).
Turning to the other issues before it, the Court concluded that under TILA's Section 1641(c), a consumer having the right to rescind may rescind as against an assignee of the original creditor, such as the Loan Owner and other defendants in this case.
Ralph T. Wutscher
McGinnis Tessitore Wutscher LLP
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