There is a substantial likelihood that any California home mortgage refinance transaction during the last three boom years contains flaws that allow the borrower to rescind the transaction.  But rights under Truth in Lending expire three years from the date of the loan.

If you borrowed money to refinance your home or took out a home equity line of credit, violations of TILA allow you to unwind the transaction.   Everything you paid to get the loan and everything you paid to the lender since then is a credit against the principle amount of the loan.

The right to rescind contemplates that the borrower then tender to the lender the difference between the original loan and all the credits the borrower is entitled to.  Historically, that tender was achieved by refinancing with a new loan.  Alternatively, borrowers are negotiating with lenders to modify the defective loan to one for a smaller amount, presumably on better terms.

The power of Truth in Lending is that it is a strict liability statute:  the borrower doesn’t have to prove they were deceived or that they were damaged.  They need prove only that the law was broken.  The borrower is entitled to their attorneys fees for making this happen.

Powerful, huh?  But the opportunity only lasts for three years from the date of the loan.  Get your loan documents reviewed to see if you have rights under Truth in Lending.

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