A Forensic Loan Audit can find violations of the

Truth in Lending Act.

 

There were so many loan documents made in Las Vegas over the past 5 years that many of them contain numerous TILA violations.  

TILA provides that, when a loan made in a consumer credit transaction that is secured by the consumer's principal dwelling, the consumer has the right to rescind the transaction, which is to say, revoke the contract, until midnight of the third business day following the consummation of the transaction or delivery of the material disclosure and rescission forms, whichever is later. See 15 United States Code § 1635(a). 

If the creditor fails to deliver the forms, or fails to provide the required information, then the consumer's right of rescission extends for three years after the date of consummation of the transaction, or until the property is sold, whichever occurs first. See 15 U.S.C. § 1635(f); 12 C.F.R. § 226.23(a)(3).   

Within 20 days after receipt of a notice of rescission from the consumer, the creditor shall take any necessary action to reflect the termination of any security interest created by the transaction. Which means release the deed of trust, unwind the sale of the home, etc. See 15 U.S.C. § 1635(b). 

Section 1640(e), of TILA states that all TILA claims must be brought "within one year from the date of the occurrence of the violation." See 15 U.S.C. § 1640(e). The violation "occurs" when the transaction is consummated, loan documents signed etc.   TILA's limitations period is subject to what we lawyers call "equitable tolling", however, in cases where the debtor has been prevented from bringing suit due to inequitable circumstances.   

This is so in at least some Circuit Courts of Appeal, the 9th Circuit Court of Appeals doesn�t seem to have addressed the issue just yet. I have a feeling they soon will. If a cause of action, or the reason for a lawsuit was fraudulently concealed from the consumer until after a year had passed the consumer would be prevented from pursuing the cause of action, this would be an "inequitable" or unfair result. Below there is a discussion of Equitable tolling.  It should be noted, that many courts have held that the three-year rescission period supplied by § 1635(f) is emphatically not a statute of limitations that is subject to tolling. So, it might be assumed that three years, is three years, no matter the equities.  Perhaps the U.S. Congress can help us out there by changing the law. 

Equitable tolling is principle of law stating that a statute of limitations shall not bar a claim in cases where the plaintiff, despite use of due diligence, could not or did not discover the injury until after the expiration of the limitations period. 

TILA violations may be used as a defense against foreclosure and as a defense against any deficiency actions to recoup the difference in price between the money loaned to a homeowner and the amount the lender recovered in a Trustee's Sale.  See 15 U.S.C. § 1640(e).