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10th Circuit Challenges SCOTUS on TILA Rescission — Pohl v US Bank, "Trustee"

by Neil Garfield | July 3, 2017

“Courts are still inventing doctrine out of whole cloth allowing banks to escape liability and responsibility for their wrongful acts. This decision is so far off the charts that it will most certainly be reversed.”

The reason why the decision is flat out wrong and in conflict with SCOTUS is that the statutes, 15 U.S.C §1635 and the Jesinoski decision make it irrefutably clear that TILA rescission is an event, not a claim. The statute is procedural. SCOTUS in Jesinoski unanimously said it is an event (which is what the statute says) while the 10th Circuit says it is a claim. The only “claim” is whether or not the rescission notice was sent. In this case, like all others, there is no dispute over the mailing and delivery of the notice of rescission.

This Court has made up a new doctrine out of thin air that brings them into direct conflict with the Jesinoski decision, in which the court stated that the homeowner need take no further legal action to effectuate rescission after notice is sent.

This Court states that if the bank disagrees, the event becomes a claim that is subject to res judicata and preclusion because the homeowner did not raise the issue in prior proceeding. Since TILA rescission is an event, effective upon mailing, there is no “Claim.” Hence there can be no preclusion.

As an example, if a trial judge were to enter an order, even if wrongly based like this decision from the 10th Circuit, it is effective and binding on all who are served with the order. Nobody needs to bring a lawsuit or defense in which they have the burden of proof on whether the the order was effective. It is effective because the statutes say it is effective. End of story.

TILA Rescission and a court order are identical because they derive their power from the same source — legislation. Courts may not rewrite legislation nor ignore legislation when it suits the bias of the Judge. If anyone has a problem with a court order it is their burden to try to bring the issue to court, not the person who benefited. IN the meanwhile the court order is effective, until and unless a new order is entered changing the original order.

If the bank thinks the notice of rescission was wrongful, the burden does not shift to the homeowner just because the bank says so — that would negate the entire premise of the TILA Rescission statute and the Supreme court decision in Jesinoski. The entire premise of the TILA Rescission statute was that Congress decided to load ALL burdens on the bank and NO burdens on the homeowner after notice is given.

This was a calculated decision by Congress to create an absolute bar to any stonewalling from the bank that would render the TILA Rescission notice pointless or useless — since all parties who were asserting “lender” positions would “disagree.” The committee notes clearly show that the intent was to absolutely bar banks from stonewalling or delaying the effectiveness — a fact clearly and expressly recognized by a unanimous decision of the US Supreme Court.

Courts don’t like it because of its draconian effect on banks. But the entire reason for the draconian effect on banks was to avoid the necessity of creating a new agency or division in Federal government that would be required to review all loan closings. Congress was forcing the banks into policing themselves to avoid falling through this trap door.

The fact that the banks screwed up most of their loan closings does not change the wording of the statute — nor does the fact that judges like to rule for banks, not consumers or homeowners. The ONLY thing that can vacate a court order is another court order. The ONLY thing that can vacate a TILA Rescission notice is a court decision and final judgment.

The BURDEN is on the “bank” to file such an action in which it complies with all normal pleading requirements — including pleading standing to sue WITHOUT reference to the note and mortgage, which are rendered void instantly upon mailing of the TILA Rescission notice. The banks are desperately seeking to avoid being required to file such a suit because they can’t. If they “allege a person or persons bring the action because they are the real creditor it would quickly be revealed that at the base of all mortgage actions and all chains of derivative financial products, there is nothing.

And as for the “poor banks” perception, look at what happens in rescission. And mind you some of this language was drafted by the banks.

Assuming the loan contract was real, the bank could easily fulfill the three duties imposed by TILA Rescission. Or, they could challenge the rescission in court. If they believe the rescission notice was wrongful then they could allege their standing and allege the defects in the sending of the rescission. If they comply within 20 days then the homeowner is obligated to pay them their principal in the loan.

If the homeowner doesn’t pay the principal on the now unsecured debt there is absolutely nothing to prevent the banks from suing for disgorgement under equitable doctrines that are firmly established in common law and under statutes. If they are truly the creditor or truly represent the party who is the creditor according to valid powers set forth in written instruments, in which the creditor grants such power.

Of course this grant must come from a “real” creditor and not by some “facially valid” based upon the note and mortgage which are now void instantly upon mailing of the TILA Rescission notice. Under these facts they would get a judgment entitling them to receive all moneys allowed under the TILA Rescission statute, and if the judgment remains unsatisfied, the banks could foreclosure their judgment lien except for homestead exemptions, which vary from state to state.

That is how the case is “settled” under TILA Rescission. The bank receives part of its money back thus taking a loss on the rest BECAUSE THEY SCREWED UP. The homeowner is still at risk of losing their home especially in Bankruptcy court where the exemption for homestead is limited to $125,000.

So when the dust settles, banks have many options to take IN COURT on an action (lawsuit) they bring to invoke the jurisdiction of the court upon pleading proper subject matter and in personam jurisdiction and then alleging why the TILA Rescission notice should be vacated by Final Judgment removing it from the chain and cancelling the instrument if it was recorded in county records.

Thus this decision from the 10th Circuit is void because it is based upon nonexistent claims — i.e., claims a rising from void documents. But as a described above, people in the 10th Circuit must assume a continuing uphill battle before someone brings this conflict to SCOTUS. I suggest preserving the issue by filing pleadings that seek to enjoin anyone from using or attempting to enforce void documents — the note and mortgage (deed of trust) or defenses that simply state that the court lacks jurisdiction because the claims based upon the note and mortgage cannot legally exist after the notice of TILA Rescission is sent.

Thousands of trial courts and hundreds of appellate courts were slapped down by SCOTUS in the Jesinoski decision for pretending the court had the right to read in common law rescission to statutory rescission. It looks like they need more discipline.

 

 

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