Lender fails in bringing Yamamoto motion by not establishing evidence that the borrower could not tender the loan proceeds in the event of rescission

In Williams v. Saxon Mortg. Co. 06-0799-WS-B (S.D.Ala., January 02, 2008) the lender unsuccessfully and prematurely invoked the Ninth Circuit’s ruling in _Yamamoto v. Bank of New York_, 329 F.3d 1167 (9th Cir.2003) to obtain judgment against a borrower. In moving for summary judgment on a TILA rescission claim, the lender asked the court to enter judgment because it was doubtful that the borrower had the ability to tender the loan proceeds in the event the court ordered rescission. The court held that the lender’s request that the Court order the borrower to produce definitive evidence of their ability to tender the necessary rescission amounts improperly shifts the lenders burden on summary judgment to the non-movant to produce evidence of that fact. The court chided the lender for not exploring in discovery whether the borrower had the means to tender. The court said it will not in effect conduct discovery for the lender by requiring the borrower to produce evidence of their ability to pay, when such information could and should have been elicited during the discovery process. The court also found that evidence produced by the borrower showed that he could pay the full balance of the loan within a reasonable time period if rescission were ordered. It joined two other courts who recently have denied judgments to lenders on the theory that the borrower’s cannot demonstrate their ability to tender. See, _Jones v. Rees-Max, LLC_, 514 F. Supp .2d 1139 (D.Minn.2007) and _Johnson v. Chase Manhattan Bank, USA N.A._, 2007 WL 2033833, (E.D.Pa. 2007).

Download Related Document