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Seventh Circuit Allows Survival of Homeowners TILA Lawsuit Alleging Faulty Notice - Marr v. Bank of America

December 14, 2011

The Rubidoux predatory lending attorneys at Howard Law, P.C., were interested to see a recent appeals court ruling allowing a relatively rare Truth in Lending Act lawsuit to go forward. In Marr v. Bank of America, Richard Marr of Wisconsin sued Bank of America for failing to give him the required number of notices of his right to rescind his 2007 refinance. Rather than send him both notices required under TILA, Marr alleges, the bank sent only one. After he sued in federal district court, the bank successfully moved for summary judgment to dismiss the case. But on appeal, the Seventh U.S. Circuit Court of Appeals ruled that there were enough genuine issues of material fact to survive summary judgment.

TILA requires the lender to provide clear and conspicuous notice of the borrower's right to cancel the transaction within three business days, and the federal Regulation Z requires two such notices. If the lender fails to comply, the right to rescind expands from three days to three years. Marr refinanced his home in 2007 in response to a cold call pitching the idea, thinking it would help pay off credit card bills. At the closing, he alleges that the title insurer gave him a series of documents to sign without giving him time to read them; one such document was an acknowledgement that he had received the two required TILA notices. Marr was given a folder full of the closing documents, which he promptly stored and did not touch for two years, when his attorney examined it for unrelated reasons. At that time, they discovered only one copy of the TILA notice. He sued for rescission. The district court granted summary judgment to Countrywide (BofA's predecessor) and the title company, finding that Marr's signature on the acknowledgement allowed the court to presume he had received both copies.

On appeal, the Seventh Circuit reversed this, finding that Marr's testimony that he received only one copy of the TILA notice was sufficient to rebut the presumption that he'd received both. To survive summary judgment, the court noted, parties must not prove their cases, but merely show admissible evidence that could support their cases. Thus, the question is whether Marr's testimony was enough to allow a reasonable jury to find he never received a TILA notice. The Seventh thought it was. The district court considered only Marr's attorney's testimony that he found only one copy, and Marr's own testimony that no one else could have disturbed the folder; it did not consider Marr's testimony that the closing practices were other than the title company claimed. Citing with approval the Third Circuit's recent ruling in Cappuccio v. Prime Capital Funding LLC, the Seventh ruled that Marr's testimony alone is enough to rebut the presumption for summary judgment purposes. Thus, it reversed and remanded the case.

As Westminster predatory lending lawyers, we're pleased to see that Marr will have the chance to prove his case. Though a jury may ultimately find his testimony is not credible, the ruling allows a jury of his peers to make that decision. As the Seventh noted, this case can be boiled down to whether Marr remembers correctly that the title agent did not review all of the documents Marr signed. Long Beach predatory lending attorney Vincent Howard believes that human beings tend to cut corners, especially when they have done the same job over and over again for many years and don't need to think about which steps to take. That's why we carefully review all of our TILA cases to ensure that Regulation Z was followed.

Howard Law, P.C., represents Californians who are fighting to rescind or modify loans that were made under questionable circumstances. If you'd like to talk to us about your case and your options, call us today for a consultation, at 1-800-872-5925, or send us an email.

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