(Not legal advice, for informational purposes only). Many homeowners facing foreclosure wonder can a “Rescind and Cancellation” notice (just a letter) stop foreclosure???
Essentially, that answer is YES, if the Rescind and Cancellation is done properly!
By operational law a Truth in Lending Act (TILA) enforces Rescind and Cancellation notice, only needing “an official written letter” requiring no lawsuit is effective once it is placed in the mail.
So, this is essentially how informing the lender and foreclosure attorney of its existence is effective and can stop a foreclosure.
Once the rescission notice is sent, the enforceable security interest becomes void. That means the foreclosure would also be void because of violation by operational law.
Any Deed Under Power Of Sale, would also be void because of the effect of Truth in Lending Act (TILA) by notice to rescind and cancel was in effect.
The US Supreme Court upheld, “The note and mortgage cease to exist when the notice of rescission is dropped in the mail.”
This protection is operational law and makes the Rescind and Cancellation notice an enforcement Order!!!
Is the foreclosing lender your true creditor??
If the foreclosing lender wants to reject the Rescind and Cancellation notice, just a Reply Letter is insufficient to undo the enforcement order!
The lender has exactly only 20 days to file a lawsuit within the 20 days to seek injunction relief in contest of the notice of rescission.
As of yet, no mortgage lender has ever contested TILA Violations for fraud within 20 days!
It’s virtually impossible to show proof that the loan was really funded by the originating lender!!!
That’s what inspired the Produce Note movement. Which now is a dull foreclosure defense.
Today, the use of TILA Violations for fraud is an ironclad foreclosure defense. Creating an advantageous position for homeowners to workout a mortgage foreclosure conflict with their mortgage lender faster.
If mortgage lenders could prove that mortgage securitization is truly properly funded at loan origination (as required by law)…Why don’t they just stop the enforcement order in the Rescind and Cancellation notice???
Well, most mortgage lenders hope that the homeowner will not know or understand what their Rescind and Cancellation notice truly means…Which is correct, very few homeowners or even foreclosure defense attorneys really understand the power of the enforceable order under TILA Violations!
After that time the lender will be in default.
To contest to the homeowner’s rescind and cancellation notice, the lender must 1) file a lawsuit within 20 days of receiving notice 2) prove to be the creditor without any note, enforce security instruments (deeds), assignments transfers, etc.
Because a proper Rescind and Cancellation notice by operational law immediately voids enforceable security interests (all these documents become VOID)!!!