Jesinoski V Countrywide home loans inc was a Supreme Court case that held that the Truth in Lending Act (TILA) does not require homeowners to file a lawsuit to rescind loans and that sending the written notice is sufficient to effectuate rescission.
After three years of borrowing money from the Countrywide Home Loans, Inc to refinance their mortgage, petitioners Larry and Cherryl Jesinoski sent Countrywide a letter professing to withdraw the transaction. Respondent Bank of America Home Loans replied, refusing to acknowledge the validity of the rescission. A year later, the Jesinoskis filed a suit in Federal District Court seeking a declaration of rescission and damages.
Countrywide Home Loans sought a judgment on the pleadings and filed that the Jesinoskis did not file their lawsuit within the three years that is mandated by TILA. The District Court passed a judgement on the pleadings for respondents, concluding that a homeowner can exercise the Truth in Lending Act’s right to rescind a loan only by filing a lawsuit within three years when the loan was concluded. The lawsuit by the Jesinoskis which was filed for about four years after the loan was concluded, was ineffective.
The congress passed the Truth in Lending Act, to help homeowners “avoid the uninformed use of credit and to protect them against inaccurate and unfair credit billing.”
To this end, the Act permits homeowners the right to rescind a loan “until midnight of the third business day following the conclusion of the transaction or the transaction or the delivery of the disclosures needed by the act, whichever is later, by notifying the creditor following the Federal laws
The Court decided that TILA only requires written notice. In the wake of this clarification, many courts have been tasked with addressing claims about Jesinoski’s effect on the law of TILA rescissions.
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