Jesinoski v. Countrywide Home Loans, Inc TILA Rescission

If you want to stop a foreclosure sale using TILA rescission you must first understand that most, if not all, of the judges are bias against the idea of you (the homeowner) getting a “free house”. Lots of people who lose a case scream bias, mainly because the judge ruled against them and they are probably right. That there is bias involved in every case every judge is a human being and every human being has biases and preferences. You take that out of the equation and you can’t have people making decisions in the courts. So if you’re looking for a courtroom without bias you’re out of luck. The real test is whether the judge is willing to put his personal biases and preferences aside and judge the case without personal bias or preference. But we all know that is impossible even if it is the ideal of our judicial system. I never heard the winner of a case yell bias. That’s true even if the winner believes he won because of bias. The people who decide about bias whether bias escalated to prejudgment of the case people who make that decision are judges and in most cases it’s the same judge that’s been accused of bias unless there is a motion for cause which has to be in my knowledge a specific conflict of interest that not only can be alleged, but can be proven.


So for example people have told me that a judge has and lots of shares of Bank of America in his portfolio as disclosed in public records that could be a basis for saying that bias existed but the question is whether or not the judge would be unable to render a fair decision in his mind or her mind because of holding those securities. For my card I think it’s a better policy if the holding of securities is substantial in a bank or other party that’s appearing before the judge that the judge recused but the judges don’t agree and I don’t think that’s going to change. It’s the human factor that makes all judicial systems imperfect. So get off your soapbox and stop yelling about bias and instead figure out what the bias is and attack the bias head-on.


The whole point of any judicial system is to settle matters in dispute and to settle them with finality such that means that the decision itself is the truth now regardless of whether you might view it as true or not. Once a judgment has entered a court of law that’s the truth for the purposes of the case you can challenge that in certain ways but basically that’s it then the point is finality they don’t want disputes going on forever because that disrupts society and the marketplace. If bias was the basis of challenging a decision there would be no final decisions the losing party would always shout bias and the decision would go into limbo. Our judicial system recognizes that judges are human beings that all human beings have biases and preferences the question is not whether the bias exists it is whether the bias caused the judge to prejudge the case. In other words, you already had the case decided before he walked in the courtroom. You already had the case decided before he heard any evidence or argument or anything. So let’s stop pretending that judges don’t understand, well that they have been bought off or whatever when it comes to TILA rescission. Let’s face it let’s face the facts judges have ignored the Express wording of the TILA rescission statute because they don’t like the TILA rescission statute. They have never liked TILA they especially don’t like the TILA rescission statute. So they made up doctrines that were just plain wrong and one by one these doctrines have been knocked down most forcefully in Jesinoski v. Countrywide Home Loans, Inc. Judges insisted on treating TILA statutory rescission as common law rescission. That was knocked down in several Court decisions judges insisted on treating rescission as a claim rather than a remedy that is effective by operation of law. Jesinoski v. Countrywide Home Loans, Inc knocked that one down and still judges keep inventing one excuse after another for ignoring or not allowing rescission to be taken into effect as part of their decision even though the rescission has already taken effect by operation of law after being admonished by the Supreme Court judges are nearly United that they won’t let the law be used by borrowers to get out of a deal when that is exactly what Congress and the president who signed that law intended. This is one of those many cases where the bench is basically attempting to make policy when that role is limited to the legislative branch Congress. So why are the judges so adamant well because they don’t like the result and the result they don’t like is their perception of borrowers getting a free house and yes even if it means giving some stranger to the deal a free house. They will do that rather than giving consumers or homeowners what they perceive to be a free house.


What’s behind that is they think that in essence the debt has been eliminated rather than just the paperwork and they’re wrong and that’s what should be pointed out? So, when you encounter this you’ve got to deal with reality pouring logic and legal argument into the courtroom will not dissuade a judge from knocking down or ignoring an effective TILA statutory rescission that’s not right but it’s the way it is and if you want to win you’ve got to move to the power of persuasion where you are able to affect the biases of the judge. So what do you do? I’m reminded of a case I had some twenty years ago maybe thirty where I represented a defendant in a criminal trial he was accused of assault with a deadly weapon. The jury convicted him of a much lesser charge reckless display of a firearm. When it came to sentencing the judge started down a track where I was forced to interrupt the judge. I said basically, “judge you are making statements that make it clear that you want to sentence this defendant for what you believe he should have been convicted for instead of what he was convicted for”.


So, what happened there? The judge was startled and he had to admit that that’s exactly what he was doing he thought that my client should have been convicted for assault with a deadly weapon. So that’s kind of what you want to do that’s what you need to do startle the judge and you can only do that if you look him between the eyes on his own bias there’s no better way than challenging the very core of his bias the free house myth which is closely tied to the no debt myth. There is no free house and the debt is not eliminated by utilizing TILA rescission and in any event, even with no down payment, no borrower would be getting a free house even if a judge announced a free ride and approved of a free house. Every homeowner has lots of money invested in the house but more important than that is the fact that a favorable judgment on TILA rescission does not get rid of the debt it never does. The only thing that gets rid of the debt is abandonment by the creditor that’s a whole different thing. So under 15 USC 1635 the TILA rescission statute the loan contract is canceled but the debt remains and that debt is completely enforceable. But it is only enforceable using the TILA rescission statute because that replaced the contract which is now void. That replaced the note and mortgage which is now void, the fact that the paperwork the note and mortgage or deed of trust is now void by operation of wood as extinguish the debt. A creditor who relies on his own payment for ownership of the debt can still sue for judgment of money damages and as the holder of that judgment, the creditor can foreclose on that judgment along with other property and money of the borrower. A creditor who has complied with the statute can even get relief from the rescission on the basis that the borrower was unwilling or unable to tender some plan of repayment.


However, if the creditor with legal standing that is the owner of the receivable created by the debt fails or refuses to comply with the TILA rescission statute only then is the creditor stopped from collecting on a debt. So if they abandon their rights then like other situations when you abandon your rights you lose you lose the claim. It’s even possible that the creditor who owns the debt could seek ownership of the paper by asking for an equitable trust to be imposed on the note and mortgage. Lots of options are out there for real creditors and banks are smart enough to know what they are. But even if the creditor doesn’t want to comply with the statutory duties under the rescission statute, the creditor still has options.


A creditor can avoid both compliance with the statute and the loss of the ability to enforce the debt and can reinstate the note and mortgage by filing a lawsuit to vacate the TILA statutory rescission that is where the necessity of a lawsuit comes into play it’s not that borrowers invoking rescission need to file a lawsuit. It’s the creditor who wants to revoke the rescission that needs to file the lawsuit the problem here is barely understood but suspected by judges in all these cases where there’s some kind of claim of securitization or even where entities like Citibank try to pretend that there was no securitization. In all of these cases the foreclosing parties are relying completely on the paper which is now void by operation of law after the delivery of the notice of statutory rescission after they were owner the owner of the debt they would have no problem filing the lawsuit to vacate the rescission they would have standing to do so because they don’t need the paper they could file with standing because as the owner of the debt. But we don’t see those lawsuits, do we?


The would-be foreclosures decided despite strong advice to the contrary and articles from their own lawyers which can be readily viewed on the internet that they would ignore the notice of rescission and would attempt to steamroll their way through court inventing various restrictions that conflicted with the Express unambiguous words of the TILA rescission federal statute. And up to now, it’s basically worked there are some exceptions where judges have ruled in favor of the homeowner but the overwhelming number of decisions at the trial court level and even at the Circuit Court of Appeals level have been negative to the homeowner. But I believe that the right strategy is to challenge the judge and ask him or her directly if he or she knows that the TILA rescission statute does not void the debt. Just ask that question your, honor are you aware of the fact that the TILA rescission statute does not void the debt? It just voids the paper, I think you’re entitled to ask that whether you are or not I would encourage people to do that subject to advice of local counsel. There’s lots of things we in order to shake up things that are already stacked against you in a court where you need to do something like that that is for lack of a better phrase out of order. How the judge answers that question is irrelevant, because you’ve already planted the seed.


The only path to what the judge considers to be a free house is by refusing to comply with 15 USC 1635 the TILA rescission statute or by refusing to file a lawsuit to get free of the rescission. The perception of a free house is wrong that’s true but you have to attack it at its base and to attack it at its base is to reinforce the fact that 15 USC 1635 does not eliminate the depth. In fact, it provides for a specific method by which the debt can be collected. So this is kind of like having a lawsuit or notice of sales served on you for foreclosure and you refuse to do anything to defend the home you lose even though the facts might have shown that the entity’s initiating foreclosure were actions of malice and fraud.


You lose if you do nothing that is how it works for homeowners and that’s how it should work for anyone other than homeowners. If you use this kind of approach with a judge you need to be nimble on your feet and that’s why I think probably unlikely that any per say litigant is going to have success in making a direct challenge to the judge. But I think a lawyer especially a seasoned trial lawyer would know how to work this. What you want to get is a judge who is biased you have to take that as a given to move a little away from his bias. So that he’s willing to look at what the outcome really is as long as he thinks the outcome is going to be that you have no debt and therefore you’re getting a free house. It’s obvious I mean you have to take it as reality there’s no judge for the most part who’s going to rule in your favor, even if your rescission was properly sent and even you know all things were right. The judge still is not going to do it like I said there been some actions on that you have to know you judges because you don’t want to go in there like a raving lunatic arguing about things that the judge has actually researched and come to the same conclusion that you did.


So, in challenging the judge you, of course, need to be respectful but I think the right question is judge are you aware of the fact that rescission TILA rescission does not eliminate the debt in fact it’s just the opposite of provides a method for collection and failure to collect on the debt opens up a world of remedies for the creditor. So nobody’s walking out of here judge with a free house, but as decided by Congress the ones who are going to be on the heels are going to be the would-be foreclosures in this case of the bank or whoever who are going to have to make up time and tracks. So it is, of course, necessary for you to be completely familiar with the statute and the case law and the articles. But make sure when you’re researching the articles that you also and you find some of them on my blog make sure that when you research the articles that you don’t just look for articles from the defense side that you look for articles from lawyers who represent the banks and the investment banks servicers etcetera.


Because you’re going to find that everything I’ve been saying for 11 years is basically the advice that the bank lawyers have given to their bank clients and in presentations and articles from the bank lawyers who have all said if you’re going to ignore this and that’s why they came out with these articles. If you’re going to ignore TILA rescission then you do so at your peril because that is the one thing that can cause you to lose the debt. Now, of course, the banks actually don’t care if they lose the debt and that’s where it gets counterintuitive, their objective is to get a foreclosure judgment which will be the first official document in their fake chain of what they call title. A really fabricated documents and what they’re concerned with is not protecting the debt although they’ll go work it that way so it looks in court like that’s what they’re doing is protecting the debt what they’re really protecting are ten or maybe as much fifty layers of derivative securities that were issued and sold by them or where they convinced someone else to take certain risks about them all based in part on the validity of your loan. And if rescission is effective by operation of law the way it says in 15 USC 1635 then the value of those derivatives plummets. In fact, it may well be zero even without all the arguments about how securitization separates the debt the note and the mortgage they go up in three different directions.


So, when you are approaching this make sure that you understand the exact timing of when things happen in 15 USC 1635 and that was the point of the Jesinoski v. Countrywide Home Loans, Indecision. That statute basically sets forth how notice can be given and when it is effective that’s in summary what the Jesinoski v. Countrywide Home Loans, Inc decision said. If it is effective at the moment of mailing if it’s US Mail that’s used that’s considered delivery, then everything after that has to be in accordance with the rescission or a lawsuit to get rid of the rescission.


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