Source: https://fightforeclosure.net/2014/06/11/how-homeowners-can-effectively-use-tila-in-their-foreclosure-defense/
Timestamp: 2019-04-18 13:34:33+00:00

Document:
Many homeowners often wonder what is TILA and how it applies to them.
This post is designed to enlighten homeowners about the benefits of TILA in their foreclosure defense.
rescission must be filled in. If the notices are not given or other material disclosures are not made, the rescission right is extended from three days to three years from the completion of the transaction. See In re Lombardi, 195 B.R. 569 (Bankr. D.R.I. 1996).
Any extension of the right of rescission beyond the three-year period provided by TILA must come from state law. The Supreme Court in Beach v. Ocwen Fed. Bank, 523 U.S. 410 (1998), held that federal law does not provide an extension of more than three years, and that equitable tolling does not apply because the three year limit is a statute of repose, not a statute of limitations. Some states allow rescission in recoupment beyond the TILA’s three-year extension period. See, Fidler v. Cent. Coop.
1. The debtor must first give notice of the rescission. By invoking rescission, the debtor is relieved of liability for any finance or other charge, and the security interest becomes void.
2. The creditor must return any money paid or property given, including the down payment.
3. The debtor must tender any property received or the value of it.
Courts have considerable discretion concerning the three-step process, and are able to circumvent the process if they see fit. See, Williams v. BankOne, N.A. (In re Williams), 291 B.R. 636 (Bankr. E.D. Pa. 2003); Bell v. Parkway Mortgage, Inc. (In re Bell), 309 B.R. 139, 167 (Bankr. E.D. Pa. 2004).
In the event a court requires that the principal debt be repaid in Chapter 13 bankruptcy, the rescinding borrower/debtor still receives a considerable benefit. In this case, the creditor must reduce the obligation by the amount the borrower has paid through any down payment, closing costs, insurance premiums and by the amount of the finance charges. The obligation to repay only the principal over the life of a Chapter 13 plan is an unsecured claim.
dealing with personal property loans, although rescission is not available, the statutory damages are twice the finance charge, with a minimum of $100 and a maximum of $1000. See, Koons Buick Pontiac GMC, Inc. v. Nigh, 125 S. Ct. 460 (2004).
one-year statute of limitations, however, mere failure to make disclosures is not enough. The consumer must prove the creditor concealed the violation and that the consumer exercised due diligence to discover the facts giving rise to the claim. See, Evans v. Rudy-Luther Toyota, Inc., 39 F. Supp. 2d 1177 (D. Minn. 1999).
– Citation: 15 U.S.C. §1601, et seq.
but on significantly more favorable terms. Citing Matthews,.
In re Nat’l Century Fin. Enters., Inv. Litig., Fed. Sec. L. Rep. (CCH) P94,314 (May 2007) “[W]hile Plaintiff is required to prove the existence of some unlawful act independent of the civil conspiracy itself, that unlawful act does not need to be committed by each of the alleged co-conspirators.” Citing Matthews,.
(4) A change in the payment schedule or a change in collateral requirements as a result of the consumer’s default or delinquency, unless the rate is increased, or the new amount financed exceeds the unpaid balance plus earned finance charge and premiums for continuation of insurance of the types described in Sec. 226.4(d).
the consumer or on the consumer’s behalf, or the rescheduling of payments under an existing obligation. In any form, the new obligation must completely replace the prior one.
– Changes in the terms of an existing obligation, such as the deferral of individual installments, will not constitute a refinancing unless accomplished by the cancellation of that obligation and the substitution of a new obligation.
– A substitution of agreements that meets the refinancing definition will require new disclosures, even if the substitution does not substantially alter the prior credit terms.
replaced, new disclosures must then be made.
amount or number of payments is increased beyond that remaining on the existing transaction.
Workout agreements. A workout agreement is not a refinancing unless the annual percentage rate is increased or additional credit is advanced beyond amounts already accrued plus insurance premiums.
Insurance renewal. The renewal of optional insurance added to an existing credit transaction is not a refinancing, assuming that appropriate Truth in Lending disclosures were provided for the initial purchase of the insurance.
This regulation limits refinancing to transactions in which the entire original obligation is extinguished and replaced by a new one. Redisclosure is no longer required for deferrals or extensions.

References: v. 
 v. 
 v. 
 v. 
 v. 
 v. 
 §1601