Monday, November 22, 2010

Homeowners Could Lose One More Option For Fighting Foreclosure

Homeowners Could Lose One More Option For Fighting Foreclosure:

a proposed change to the Truth In Lending Act (TILA) proposed by the Federal Reserve would take away the most powerful weapon consumers have to stop wrongful foreclosures: the right of recession.

"Currently under TILA, homeowners who are not given the correct documents at closing have up to three years to send a notice to their lender rescinding their loan. The lender is then required to cancel its security interest in the property. That doesn’t mean the homeowner is off the hook, though. He or she still has to pay the balance due, though that won’t include fees and interest that have accumulated.
Under the proposed change, lenders would be able to require homeowners to first pay the balance due before releasing the security interest. This would make it virtually impossible for a homeowner to exercise the right of rescission. It would be impossible for them to find a single lender who will lend them the amount needed to pay off the original lender if that lender still has a first priority lien on the property."

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