• February 3, 2012

Gary and Sally Peterson of Blaine borrowed $840,000.00 in December, 2006 secured by a mortgage on their home and, like so many others nationwide, apparently were unable to keep up with their monthly mortgage payments.

Within three years, they sought to rescind the mortgage loan claiming that they had a right to do so under the Truth in Lending Act.  They had completed the required “notice of right to rescind” within the three-year time-limit of the Truth in Lending Act but they did not bring their legal claim until after the three years had expired.  Can they do that?

No.  U.S. District Court Judge Donovan W. Frank (D. Minn.), acknowledging a circuit split and acknowledging that the U.S. Court of Appeals for the Eighth Circuit has not weighed in on this issue to date, nevertheless adhered to the majority rule.

This undoubtedly comes as some solace to mortgage lenders to the extent that it stanches the hemorrhage (that many argue vehemently was self-inflicted) that has put economies world-wide into hypovolemic shock for several years now.

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