In my last article I told you how you might be able to wipe out virtually any mortgage through a TILA rescission. The idea of rescinding a loan using the Truth in Lending Act had been around for a while, but its viability in court was completely dependent upon the whims and prejudices of the individual judges hearing the cases. Well, the Supreme Court of the United States cleared all of that up with a unanimous decision that has cleared the way for TILA rescissions. As I explained last month, the opportunity is HUGE, but could our window be closing?
The decision as spelled out by Justice Scalia of the Supreme Court is extremely rigid. It says that a bank has 20 days from the time a notice of rescission is dropped in the mail to contest its validity. After that 20-day window is up, the note has been rescinded as an operation of law. The notice of rescission itself carries all of the power of a court order. No further proof or lawsuit is required from the borrower, and after the 20-day period, no arguments can be made by the bank. The bank must provide the cancelled promissory note, file a satisfaction of the mortgage, and pay back all of the money paid by the borrower. While collecting all of this will almost certainly require the borrower to file an enforcement action against the bank, the ruling allows for no deviation from the letter of the law. It no longer matters what a particular judge thinks of the law.
This is about as strong of a ruling as anyone could possibly hope for, and that is why homeowners and real estate investors are most likely dealing with a limited window of opportunity. The banks have been dealt a major blow. The decision has very likely destroyed the value of a huge number of mortgage backed securities that they are selling. The banks aren’t going to take it sitting down. While the Supreme Court has made it impossible for any judge to change the law from the bench, Congress is going to be under tremendous pressure from the entire mortgage and banking industry to change the law. Once the law is changed, it could be years before another rescission case gets in front of the Supreme Court, if indeed one ever does.
This makes it more important than ever that homeowners and real estate investors act NOW. The tides have turned and the banks are being forced to negotiate on our terms. No more begging the banks to accept our short sale and REO offers only to have them demand ridiculously high prices. We can now get the banks to the table and demand that they prove they have the right to enforce a loan.
This is a massive opportunity for real estate investors. If you know of anyone with a defaulted or underwater note, you need to get in contact with my office immediately at (706)-485-0162. I have spent the last two years building up a team of experienced attorneys and fraud examiners/forensic auditors who specialize in exposing fraud committed in the mortgage process and using that fraud as leverage to negotiate the sale of notes. This opportunity is not going to be available forever; we need to strike while the iron is hot!
We have a huge opportunity to help homeowners and do some great deals with multiple exit strategies. For more information, call me at 706-485-0162.