(This information is intended for informational proposes only and not legal advice). Once a borrower notifies the mortgage lender of their right to rescind and cancel the mortgage loan, it is officially void by no court order needed only proper notice by official letter. So what happens next after this process has everything to do with becoming educated on how-to properly resolve a mortgage conflict resolution.
Who can exactly rescind and cancel a mortgage loan contract?
It might surprise many people to learn that currently under The Truth in Lending Act (TILA), anyone with security interest in a property has a right to rescind and cancel the mortgage loan contract!
For the purpose of MortgageCancellationSecrets.com we focus on TILA fraud violations to rescind and cancel mortgage loan contracts for homeowners under distress. So, in other words any homeowner denied a loan modification, facing foreclosure, upside down mortgage – owe more than the property is worth, etc. This is where they would come to learn about how-to discover TILA fraud violations to actually rescind and cancel mortgage loan contracts.
After Rescinding A Mortgage Loan
When the Rescind and Cancellation of a mortgage is in effect the lender has 20 days to give up security interest in the property and pay back all money ever paid by the homeowner.
This is the best time to attempt to resolve the conflict resolution between the lender and the homeowner.
What if the three year statute of limitations has expired to rescind?
When fraud is involved this vitiates the mortgage loan contract. To rescind and cancel a mortgage loan after three years will also require identifying fraudulent disclosures.
Fraud vitiates all contracts, written or verbal, sealed or unsealed. Offering discovery evidence to reset the clock after the required three year statute of limitation enforcement for fraudulent lack of full disclosures.
TILA still requires that borrowers must also be prepared to Tender once they rescind and cancel their mortgage loan contracts. However, the statute right now is very clear that in “twenty days” the lender must first return all payments made by the borrower and even release the security instrument such as Deed of Trust, Security Deed or Mortgage before Tender is required to be made.
A homeowner (borrower) must understand, that before tender of the loan proceeds to the lender is required. The loan is cancelled at the moment notice is given. Which requires the lender to FIRST return all payments and terminate its security interest within 20 days, before Tender is to be made by the homeowner (borrower)! The borrower then must tender the loan proceeds to the lender only AFTER the lender returns all payments and terminate “VOID” its security interest. This puts the homeowner (borrower) in a better financial position to Tender the loan amount after receiving all payments made and the property back FREE AND CLEAR any lien from the lender.
This process further creates a bigger problem for lenders seeking to foreclose on borrowers. Those borrowers facing foreclosure, who have properly notified the lender to rescind and cancel their mortgage loans attack the enforceable security interest of the property.
To foreclose the lender must have enforceable security interest, this has nothing to do with produce the note. That strategy is dead.
Enforceable security interest requires that the lender has a right to enforce the security interest to foreclose. Which is strictly required in every state by law, no matter if the foreclosure process is non-judicial or judicial.
For a lender to contest a Rescission Notice received from a borrower to Rescind and Cancel, the lender must also follow strict procedures. If the lender opposes the borrower’s right to rescind and cancel the lender must send a letter to the borrower stating the reasons why and object to the rescind in the letter.
Most homeowners facing foreclosures think that this notice clears the lender and gives the lender a right to proceed with foreclosure after sending a notice of objection to the Rescind and Cancel notice received by letter.
This is why homeowners facing foreclosures and their foreclosure defense attorneys must get educated. The borrower has a right to assert rescission as an affirmative defense to challenge a foreclosure or by and through declaratory judgment (relief) to halt or void a foreclosure sale.
After the homeowner rescinds the mortgage they also have 1 year to file for declarative relief.
Under 15 U.S.C. § 1635(b); Reg. Z §§ 226.15(d)(1), 226.23(d)(1) once the borrower properly sends notice to Rescind and Cancel, the security interest is void by operational law.
What homeowners facing foreclosures and foreclosure defense attorneys need to know is that “security interest is void” upon the proper rescind and cancel notice. Regulation Z is also very clear, the security interest is void and of no legal effect upon rescind and cancel notice. Should the lender make objection to the borrower’s rescind and cancel notice, Regulation Z dictates that the security interest is void by operational law.
Regulation Z is further very clear that by through now 15 U.S.C. § 1625(b) that IF a lender wishes to dispute a borrower’s right to rescind and cancel, a declaratory judgment action must be filed within 20 days after receiving the rescission notice. This would be the urgent deadline to return all payments made by the borrower and void the security interest.
The biggest problem is that many homeowners and even foreclosure defense attorneys don’t properly know how-to rescind and cancel their mortgage loans for TILA fraud violations. This must be done correctly and by strict statute.
Homeowners must properly rescind and cancel a mortgage loan. This is why we created DIY Rescind and Cancel Mortgage Forms with easy instructional preparation. The information contained in these forms are battle tested and proven strategies used by foreclosure defense attorneys, mortgage loan auditors, forensic audit specialists, and more.