Mortgage Servicing Fraud
occurs post loan origination when mortgage servicers use false statements and book-keeping entries, fabricated assignments, forged signatures and utter counterfeit intangible Notes to take a homeowner's property and equity.
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Bruce
 



Sec. 226.23  Right of rescission.
[Code of Federal Regulations]
[Title 12, Volume 3]
[Revised as of January 1, 2003]
From the U.S. Government Printing Office via GPO Access
[CITE: 12CFR226.23]

[Page 288-290]
 
                       TITLE 12--BANKS AND BANKING
 
                   CHAPTER II--FEDERAL RESERVE SYSTEM
 
PART 226--TRUTH IN LENDING (REGULATION Z)--Table of Contents
 
                      Subpart C--Closed-End Credit
 
Sec. 226.23  Right of rescission.

    (a) Consumer's right to rescind. (1) In a credit transaction in
which a security interest is or will be retained or acquired in a
consumer's principal dwelling, each consumer whose ownership interest is
or will be subject to the security interest shall have the right to
rescind the transaction, except for transactions described in paragraph
(f) of this section.\47\
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    \47\ For purposes of this section, the addition to an existing
obligation of a security interest in a consumer's principal dwelling is
a transaction. The right of rescission applies only to the addition of
the security interest and not the existing obligation. The creditor
shall deliver the notice required by paragraph (b) of this section but
need not deliver new material disclosures. Delivery of the required
notice shall begin the rescission period.
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    (2) To exercise the right to rescind, the consumer shall notify the
creditor of the rescission by mail, telegram or other means of written
communication. Notice is considered given when mailed, when filed for
telegraphic transmission or, if sent by other means, when delivered to
the creditor's designated place of business.
    (3) The consumer may exercise the right to rescind until midnight of
the third business day following consummation, delivery of the notice
required by paragraph (b) of this section, or delivery of all material
disclosures,\48\ whichever occurs last. If the required notice or
material disclosures are not delivered, the right to rescind shall
expire 3 years after consummation, upon transfer of all of the
consumer's interest in the property, or upon sale of the property,
whichever occurs first. In the case of certain administrative
proceedings, the rescission period shall be extended in accordance with
section 125(f) of the Act.
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    \48\ The term ``material disclosures'' means the required
disclosures of the annual percentage rate, the finance charge, the
amount financed, the total payments, the payment schedule, and the
disclosures and limitations referred to in Sec. 226.32 (c) and (d).
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    (4) When more than one consumer in a transaction has the right to
rescind, the exercise of the right by one consumer shall be effective as
to all consumers.
    (b)(1) Notice of right to rescind. In a transaction subject to
rescission, a creditor shall deliver two copies of the notice of the
right to rescind to each consumer entitled to rescind (one copy to each
if the notice is delivered by electronic communication as provided in
Sec. 226.36(b)). The notice shall be on a separate document that
identifies the transaction and shall clearly and conspicuously disclose
the following:
    (i) The retention or acquisition of a security interest in the
consumer's principal dwelling.
    (ii) The consumer's right to rescind the transaction.
    (iii) How to exercise the right to rescind, with a form for that
purpose, designating the address of the creditor's place of business.
    (iv) The effects of rescission, as described in paragraph (d) of
this section.
    (v) The date the rescission period expires.
    (2) Proper form of notice. To satisfy the disclosure requirements of
paragraph (b)(1) of this section, the creditor shall provide the
appropriate model form in Appendix H of this part or a substantially
similar notice.
    (c) Delay of creditor's performance. Unless a consumer waives the
right of rescission under paragraph (e) of this section, no money shall
be disbursed other than in escrow, no services shall be performed and no
materials delivered until the rescission period has expired and the
creditor is reasonably satisfied that the consumer has not rescinded.
    (d) Effects of rescission. (1) When a consumer rescinds a
transaction, the security interest giving rise to the right of
rescission becomes void and the consumer shall not be liable for any
amount, including any finance charge.

[[Page 289]]

    (2) Within 20 calendar days after receipt of a notice of rescission,
the creditor shall return any money or property that has been given to
anyone in connection with the transaction and shall take any action
necessary to reflect the termination of the security interest.
    (3) If the creditor has delivered any money or property, the
consumer may retain possession until the creditor has met its obligation
under paragraph (d)(2) of this section. When the creditor has complied
with that paragraph, the consumer shall tender the money or property to
the creditor or, where the latter would be impracticable or inequitable,
tender its reasonable value. At the consumer's option, tender of
property may be made at the location of the property or at the
consumer's residence. Tender of money must be made at the creditor's
designated place of business. If the creditor does not take possession
of the money or property within 20 calendar days after the consumer's
tender, the consumer may keep it without further obligation.
    (4) The procedures outlined in paragraphs (d) (2) and (3) of this
section may be modified by court order.
    (e) Consumer's waiver of right to rescind. (1) The consumer may
modify or waive the right to rescind if the consumer determines that the
extension of credit is needed to meet a bona fide personal financial
emergency. To modify or waive the right, the consumer shall give the
creditor a dated written statement that describes the emergency,
specifically modifies or waives the right to rescind, and bears the
signature of all the consumers entitled to rescind. Printed forms for
this purpose are prohibited, except as provided in paragraph (e)(2) of
this section.
    (2) The need of the consumer to obtain funds immediately shall be
regarded as a bona fide personal financial emergency provided that the
dwelling securing the extension of credit is located in an area declared
during June through September 1993, pursuant to 42 U.S.C. 5170, to be a
major disaster area because of severe storms and flooding in the
Midwest.\48a\ In this instance, creditors may use printed forms for the
consumer to waive the right to rescind. This exemption to paragraph
(e)(1) of this section shall expire one year from the date an area was
declared a major disaster.
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    \48a\ A list of the affected areas will be maintained by the Board.
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    (3) The consumer's need to obtain funds immediately shall be
regarded as a bona fide personal financial emergency provided that the
dwelling securing the extension of credit is located in an area declared
during June through September 1994 to be a major disaster area, pursuant
to 42 U.S.C. 5170, because of severe storms and flooding in the
South.\48b\ In this instance, creditors may use printed forms for the
consumer to waive the right to rescind. This exemption to paragraph
(e)(1) of this section shall expire one year from the date an area was
declared a major disaster.
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    \48b\ A list of the affected areas will be maintained and published
by the Board. Such areas now include parts of Alabama, Florida, and
Georgia.
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    (4) The consumer's need to obtain funds immediately shall be
regarded as a bona fide personal financial emergency provided that the
dwelling securing the extension of credit is located in an area declared
during October 1994 to be a major disaster area, pursuant to 42 U.S.C.
5170, because of severe storms and flooding in Texas.\48c\ In this
instance, creditors may use printed forms for the consumer to waive the
right to rescind. This exemption to paragraph (e)(1) of this section
shall expire one year from the date an area was declared a major
disaster.
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    \48c\ A list of the affected areas will be maintained and published
by the Board. Such areas now include the following counties in Texas:
Angelina, Austin, Bastrop, Brazos, Brazoria, Burleson, Chambers,
Fayette, Fort Bend, Galveston, Grimes, Hardin, Harris, Houston, Jackson,
Jasper, Jefferson, Lee, Liberty, Madison, Matagorda, Montgomery,
Nacagdoches, Orange, Polk, San Augustine, San Jacinto, Shelby, Trinity,
Victoria, Washington, Waller, Walker, and Wharton.
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    (f) Exempt transactions. The right to rescind does not apply to the
following:
    (1) A residential mortgage transaction.
    (2) A refinancing or consolidation by the same creditor of an
extension of credit already secured by the consumer's principal
dwelling. The right of

[[Page 290]]

rescission shall apply, however, to the extent the new amount financed
exceeds the unpaid principal balance, any earned unpaid finance charge
on the existing debt, and amounts attributed solely to the costs of the
refinancing or consolidation.
    (3) A transaction in which a state agency is a creditor.
    (4) An advance, other than an initial advance, in a series of
advances or in a series of single-payment obligations that is treated as
a single transaction under Sec. 226.17(c)(6), if the notice required by
paragraph (b) of this section and all material disclosures have been
given to the consumer.
    (5) A renewal of optional insurance premiums that is not considered
a refinancing under Sec. 226.20(a)(5).
    (g) Tolerances for accuracy--(1) One-half of 1 percent tolerance.
Except as provided in paragraphs (g)(2) and (h)(2) of this section, the
finance charge and other disclosures affected by the finance charge
(such as the amount financed and the annual percentage rate) shall be
considered accurate for purposes of this section if the disclosed
finance charge:
    (i) is understated by no more than \1/2\ of 1 percent of the face
amount of the note or $100, whichever is greater; or
    (ii) is greater than the amount required to be disclosed.
    (2) One percent tolerance. In a refinancing of a residential
mortgage transaction with a new creditor (other than a transaction
covered by Sec. 226.32), if there is no new advance and no consolidation
of existing loans, the finance charge and other disclosures affected by
the finance charge (such as the amount financed and the annual
percentage rate) shall be considered accurate for purposes of this
section if the disclosed finance charge:
    (i) is understated by no more than 1 percent of the face amount of
the note or $100, whichever is greater; or
    (ii) is greater than the amount required to be disclosed.
    (h) Special rules for foreclosures--(1) Right to rescind. After the
initiation of foreclosure on the consumer's principal dwelling that
secures the credit obligation, the consumer shall have the right to
rescind the transaction if:
    (i) A mortgage broker fee that should have been included in the
finance charge was not included;
or
    (ii) The creditor did not provide the properly completed appropriate
model form in Appendix H of this part, or a substantially similar notice
of rescission.
    (2) Tolerance for disclosures. After the initiation of foreclosure
on the consumer's principal dwelling that secures the credit obligation,
the finance charge and other disclosures affected by the finance charge
(such as the amount financed and the annual percentage rate) shall be
considered accurate for purposes of this section if the disclosed
finance charge:
    (i) is understated by no more than $35; or
    (ii) is greater than the amount required to be disclosed.

[Reg. Z, 46 FR 20892, Apr. 7, 1981, as amended at 51 FR 45299, Dec. 18,
1986; 58 FR 40583, July 29, 1993; 59 FR 40204, Aug. 5, 1994; 59 FR
63715, Dec. 9, 1994; 60 FR 15471, Mar. 24, 1995; 61 FR 49247, Sept. 19,
1996; 66 FR 17338, Mar. 30, 2001]




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I'm viewing TILA and HOEPA through a lens, not of rescinding, but instead, of voiding the note and mortgage completely.

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Ed
The Equitable One wrote:

I'm viewing TILA and HOEPA through a lens, not of rescinding, but instead, of voiding the note and mortgage completely.



For TILA to work you have to get another loan. Theres no such thing as a free lunch or house.

Williams v. Homestake Mortgage Co., (11th Circuit, 1992) Voiding of creditor’s security interest in home may be conditioned on consumer’s tender of amount owed to creditor after subtracting all finance charges and penalties.




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4 Justice Now
Bruce: Is that really you, or just Ed trying to be clever?

BTW: Did I miss something in that post? I really don't recall reading anything about anyone attempting to get something for nothing.

r,

4J
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bruce
I posted this article given to me from a lawyer (truth) on a http://www.talkshoe.com also http://www.lawlearners.net, about fraud because you weren't informed about this at the start of foreclosure . The Mortgage broker fee isn't reported on the settlement statement, Mine is separate from the settlement so this fits mine case. Mortgage broker fee is paid out of my selling of the other house. My understanding from the broker was it was to paid to me on closing. the broker was to be paid by the new mortgage. Wow was I mad because We lost money in the sale.
(h) Special rules for foreclosures--(1) Right to rescind. After the initiation of foreclosure on the consumer's principal dwelling that secures the credit obligation, the consumer shall have the right to rescind the transaction if:
(i) A mortgage broker fee that should have been included in the finance charge was not included; or
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I understand Ed's point Ameriquest tried to write off my loan and it made me really angry I would not have a chance to pay off my mortgage fair and square and have a sense of accomplishment. I felt like they were trying to humiliate me or dishonor me by giving me $300,000 without working for it.

What I did not understand is that through the fractional reserve system the apparent lender is really brokering your equity in the case of a conventional loan.  Most people assume that the lender is lending you money and if you default it costs them money, of course the logical assumption is that if they void the loan you get a home for free ans someone else has to pay the unpaid balance. What really happens is you alter their debt ratio and they can borrow less money alter the debt ratio enough and they must declare B.K. or be liquidated.

It's the lenders that get something for nothing as they charge you interest on a loan you provided the equity for and they brokered it into the fractional reserve system and used it to create more loans.

What most people assume is money is really debt, the most moral thing to do after becoming educated as to how the lending system really works is to force the lenders to be accountable for the losses they cause everyone by risking the borrowers, depositors and taxpayers money.

This issue is probably the stumbling block of getting action on ms fraud because the general public and even the majority in the lending industry imagine that something has been given to the borrower when it is the other way around. The general public thinks we caused the economic collapse by borrowing more than we could afford and they do not believe our story that the lenders foreclosed illegally because they think the lender would lose money doing that. Many borrowers did borrow more than they could afford and lied about income and assets to get the loan but the general public does not understand that the lenders knew that and encouraged risky lending and even coached borrowers to lie on applications and created false inflated appraisals. The reason has little to do with PMI and fees it has to do with the fact that the debt itself is the money and the loan can be converted into securities.

What I believe Ed is saying is that it's immoral to get a free home because the lender or servicer ripped you off. The truth of the system though is that the lenders and servicers risked our equity and merely created notes based on debt and its the lenders that are getting something for nothing interest on debt based notes. There is no actual loss by voiding the debt because the debt was created in a ledger.

When we personally lend money to others we are trading actual value for actual value although it's really just a note that represents our labor or property and is actually debt or promise to pay we still provided labor a service or property in exchange for that note. Quid pro quo, something for something is an ancient legal principle  as in trading a car for a boat, a bicycle for a TV, pants for shoes etc. its a legal principle of fair trade that you get property or services in exchange for property or services but with a home mortgage the lender is actually charging you interest for using your equity and leveraging. A fractional reserve mortgage is not a true quid pro quo transaction except perhaps in the respect that we as borrowers do not have the ability to leverage our own money unless of course we want to go to prison for running a Ponzi scam or creating our own money. If you consider that lenders and investors securitize the equity and the down-payment of the borrowers and create their own assets worth many many times what the mortgage is worth then even the flimsy argument that the lender leveraged your equity for you is false since they only did that in order to create  assets for themselves on top of the interest they charge you for brokering your equity.

Gold and silver traditional money is actual value so if a lender lent you gold or silver to buy a home or issued a note that was backed by actual silver or gold they held then that would be a quid pro quo transaction, but since they actually use your equity and/or down-payment to create a debt based not it is not a true quid pro quo arrangement and really they are risking your capital not theirs.


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