A federal judge in California has backed a loan servicer in a dispute over a loan cancellation claim brought under the Truth in Lending Act (TILA). In Aurora Loan Services LLC v. Britton, 2:08-cv-01535-GEB-KJM, (E.D. Calif., May 21, 2009), the Servicer asked the court to modify the normal rescission procedures (in the fashion proscribed by _Yamamoto v. Bank of New York_, 329 F.3d 1167) after the borrower was unwilling to return the balance on the loan. The borrower objected, contending that the Servicer effectively waived its right to ask for the modification by waiting four months after receipt of the notice to do so. The court did not buy that argument. It held for the servicer, assigning particular importance to the fact that the homeowner refused the Servicer’s proposal to use an escrow agent to hold deposits and transfer agreements that had sparked disagreement between the parties. Since it is undisputed that [Britton] refuses to repay the loan by using the assistance of an escrow agent, conditions should be imposed on rescission to assure that [Britton] repays the loan proceeds, the court said. Given the negotiations, four months was not too long.
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Solomon has nearly two decades of experience representing financial institutions, real estate investors and privately owned business entities. Solomon concentrates his practice in the areas of banking, consumer financial services, real estate, business law and related litigation and appellate practice.
