Term: 2014
Docket: 13-684
Jesinoski v. Countrywide Home Loans, Inc.
- Pro
13-684 JESINOSKI V. COUNTRYWIDE HOME LOANS DECISION BELOW: 729 F.3d 1092 CERT. GRANTED 4/28/2014 QUESTION PRESENTED: The Truth in Lending Act provides that a borrower "shall have the right to rescind the transaction until midnight of the third business day following . . . the delivery of the information and rescission forms required under this section ... by notifying the creditor ... of his intention to do so." 15 U.S.C. § 1635(a). The Act further creates a "[t]ime limit for [the] exercise of [this] right," providing that the borrower's "right of rescission shall expire three years after the date of consummation of the transaction" even if the "disclosures required ... have not been delivered." Id. § 1635(f). The question presented is: Does a borrower exercise his right to rescind a transaction in satisfaction of the requirements of Section 1635 by "notifying the creditor" in writing within three years of the consummation of the transaction, as the Third, Fourth, and Eleventh Circuits have held, or must a borrower file a lawsuit within three years of the consummation of the transaction, as the First, Sixth, Eighth, Ninth, and Tenth Circuits have held? LOWER COURT CASE NUMBER: 12-2202
In the case of Jesinoski v. Countrywide Home Loans, Inc., the U.S Supreme Court ruled in favor of Larry and Cheryle Jesinoski, homeowners who had attempted to rescind their mortgage loan agreement under the Truth in Lending Act (TILA). The couple sent a written notice of rescission to lender Countrywide Home Loans within three years after transaction completion as required by TILA. However, Countrywide argued that simply sending a notice was not enough and that the borrowers needed to file a lawsuit within this period. The lower courts agreed with Countrywide but were overturned by the Supreme Court which held that TILA only requires written notice from borrowers wishing to rescind home secured loans within three years. Therefore, no lawsuit is necessary for such an action according to federal law.
In the dissenting opinion for Jesinoski v. Countrywide Home Loans, Inc., Justice Scalia disagreed with the majority's interpretation of the Truth in Lending Act (TILA). He argued that TILA requires more than just a written notice to rescind a loan agreement within three years; it also necessitates filing a lawsuit if the lender disputes this rescission. According to him, merely sending a letter does not meet these requirements and cannot unilaterally alter contractual obligations without judicial intervention. The statute’s language was clear that borrowers must sue within three years if lenders refuse their rescission request. Therefore, he believed that Jesinoskis' failure to file suit within this period meant they lost their right of rescission under TILA.
