Consumer has no TILA claim if her signature was forged

In Anthony v. Anthony, NO. 08-21520-CIV (S.D.Fla., July 27, 2009) the evidence that the loan documents are forgeries was undisputed. It was also undisputed that the Plaintiff was not present at a closing and did not execute the forged documents. The question the court had to resolve then was whether Plaintiff can recover under TILA for the lender’s failure to make mandated disclosures prior to the fraudulent execution of forged loan documents. The court noted that the Eleventh Circuit has not directly addressed this issue and that the case law from other circuits is divided. But the Court found the reasoning of the Seventh Circuit persuasive. In Jensen v. Ray Kim Ford, Inc., 920 F.2d 3 (7th Cir.1990), the Seventh Circuit reasoned that disclosures under TILA must be made before a contract is consummated, and consummation occurs when a consumer becomes contractually obligated on a credit transaction. 12 C.F.R. § 226.2(a)(13). Because TILA requires disclosures only to the person who is obligated, the Seventh Circuit concluded that TILA did not provide a remedy when loan documents are forged. Thus where there is no evidence before the Court that the Plaintiff was contractually obligated under the forged mortgages at issue here, the transaction was not consummated, and the lender had no obligation to provide disclosures. The Court acknowledged that Plaintiff should have a remedy for the forgery of the contracts at issue. That remedy, however, is not provided in TILA.

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