LAWMAKERS URGE FEDERAL RESERVE TO ABANDON TILA RULE CHANGE

The Fed has recommended revising a stipulation that allows homeowners to stop a foreclosure on the grounds that the lender violated the disclosure requirements outlined in the Truth-in-Lending Act (TILA) for certain home-secured transactions, including closed-end mortgages and home equity lines of credit.


Currently, a borrower has up to three years to convince the courts to cancel, or rescind, a mortgage loan if they can prove the lender did not properly disclose the terms of the loan at the time it was signed. It’s a regulation that has been in place since TILA was enacted 42 years ago.

The proposed rule would reverse the traditional understanding of TILA’s right of rescission by requiring a homeowner to pay off the entire mortgage amount before a creditor is required to cancel its security interest in the home.

http://www.dsnews.com/articles/lawmakers-urge-federal-reserve-to-abandon-tila-rule-change-2011-01-17