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Supreme Court Rules for Homeowners Over Mortgage Dispute

(Reuters) - The U.S. Supreme Court on Tuesday ruled in favor of homeowners seeking to back out of mortgages when lenders are accused of failing to follow a federal “truth in lending” law.

On a 9-0 vote, the court handed a win to an Eagan, Minnesota couple, Larry and Cheryle Jesinoski, over the $611,000 loan they obtained in 2007 from Countrywide Home Loans Inc, now part of Bank of America Corp.

On the technical question before the justices, the court said homeowners need only write a letter to the lender, as the Jesinoskis did, and do not need to file a lawsuit in order to benefit from a provision of a federal law known as the Truth in Lending Act.

The law allows consumers to rescind a mortgage for up to three years after it was made if the lender does not notify them of various details about the loan including finance charges and interest rates. The Jesinoskis filed their notice right before the end of the three-year period and filed a lawsuit a year later after the bank said it was disputing the claim.

The language of the law "leaves no doubt that rescission is effected when the borrower notifies the creditor of his intention to rescind," Justice Antonin Scalia wrote on behalf of the court.

The provision is typically used by homeowners who are struggling to pay their mortgages. Lawyers for consumers say mortgage companies routinely violated the law in the years prior to the 2008 financial crisis. Lenders contend that notice is not enough if the bank in question disputes the homeowners' claim.

Appeals courts had been split over what homeowners have to do to trigger this rescission process. The Jesinoskis appealed a lower-court decision that favored Countrywide. The Supreme Court reversed that lower-court ruling.

The case is Jesinoski v. Countrywide, U.S. Supreme Court, No. 13-684

For the full text article, please visit http://www.reuters.com/article/2015/01/13/us-usa-court-mortgages-idUSKBN0KM1N620150113?utm_source=1.30.15+Foreclosure+%26+Consumer+Newsletter&utm_campaign=1%2F30%2F15+Foreclosure+Newsletter&utm_medium=email.


5 Comments to Supreme Court Rules for Homeowners Over Mortgage Dispute:

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chanel on Wednesday, April 15, 2015 11:03 PM
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Stock Commodity Market Blog on Tuesday, October 06, 2015 5:58 AM
I liked the way you put together everything, there is certainly no need to go any further to look for any additional information. You mentioned each and everything that too with much of ease.......
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besttermpaper on Friday, November 20, 2015 10:57 AM
that is great article
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www.chesternet.co.uk on Friday, April 29, 2016 1:17 AM
The Jesinoskis appealed a lower-court decision that favored Countrywide.
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Shimana on Sunday, May 22, 2016 8:12 PM
The main time that you will go to Court is on your real disintegration date. There is no sitting tight months for a court date or putting in hours from home or work in a stuffy court. There are no movements to be recorded and no extra expenses to be paid for superfluous hearings. You and your mate settle on every one of the choices and nothing is surrendered over to the Court. Thank you so much.
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