TILA Violations

About the Truth in Lending Act

The United States Congress passed the Truth in Lending Act (TILA) nearly half a century ago with the purpose of providing Americans with much needed protection against unscrupulous lenders. Most people who are applying for a home mortgage or other type of loan do not fully grasp the intricacies of the legal and financial aspects of the situation, and it is easy for a bank or mortgage lender to take advantage of this inexperience. Even well-meaning lenders may forget to mention important information or overlook details which a borrower needs to know in order to make an informed decision about the loan. The Truth in Lending Act seeks to remedy this situation by requiring lenders to make a set of standard disclosures concerning a proposed loan, which include but are not limited to:

• Annual percentage rate (APR)

• Monthly payment amount

• Any finance charges that may be applied

• Maximum monthly payment

• Full amount to be paid throughout the loan term

Right of Rescission Under TILA

Another feature of the Truth in Lending Act is that it provides the borrower with the right to rescind on the loan. This means that you can recover your down payment and any payments you have made, including both interest and principal, without being assessed a penalty. This right of rescission lasts for three days, but it may be extended to as long as three years in cases where the lender failed to make any of the mandatory disclosures. In the event that you choose to rescind on your mortgage, the amount that you are refunded will be deducted from the principal amount, and you will have to pay the bank the remaining principal in order to keep the property.

The bank will then have only 20 days in which to accept or reject your offer, after which point they waive their rights in respect to the mortgage and you would be left with ownership of the home. This type of rescission applies only to certain types of mortgages, and when you come to The Law Offices of Justin McMurray, P.A. for help we can review your case to determine whether it is an option for you. Even if it isn’t, we may be able to use the fact that the lender violated the Truth in Lending Act as evidence of predatory lending, whether in courtroom foreclosure defense or in negotiations over a loan modification. For more information, contact an Ocala foreclosure defense attorney at our firm today.