Lawsuit isn't required to rescind mortgage loan for disclosure violations, Supreme Court rules
Homeowners who sent a letter notifying their lender of an intent to rescind a mortgage loan for disclosure violations satisfied the requirements of the Truth in Lending Act, the U.S. Supreme Court has ruled.
The lender, Countrywide Home Loans, had contended homeowners Larry and Cheryle Jesinoski could not rescind unless they filed a lawsuit within the required three-year time frame. The Supreme Court disagreed in an opinion (PDF) on Monday by Justice Antonin Scalia.
Countrywide had claimed written notice does not suffice when there is a dispute over the adequacy of the disclosures. Scalia disagreed.
The law “nowhere suggests a distinction between disputed and undisputed rescissions, much less that a lawsuit would be required for the latter,” Scalia wrote in Jesinoski v. Countrywide Home Loans.
