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Right of Rescission Clarified – Jesinoski v. Countrywide

The U.S. Supreme Court recently ruled in favor of homeowners seeking to rescind mortgage transactions when lenders are accused of failing to provide certain required disclosures pursuant to the Truth in Lending Act (TILA), implemented by Regulation Z. The Court was tasked with determining whether a borrower exercises his or her right to rescind a transaction in satisfaction of the requirements set forth in 15 U.S.C. 1635 by notifying the creditor in writing within three years of consummation of the transaction or whether a borrower must file a lawsuit within the same three year window. Justice Scalia, delivering the opinion of the Court, stated in relation to the applicable statutory text, “The language leaves no doubt that rescission is effected when the borrower notifies the creditor of his intention to rescind. It follows that, so long as the borrower notifies within three years after the transaction is consummated, his rescission is timely. The statute does not also require him to sue within three years.”

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