DSNews The homepage of the servicing industry
The ""Consumer Financial Protection Bureau"":http://www.consumerfinance.gov/ (CFPB) filed an amicus brief on behalf of borrowers for their rights to cancel home equity-loans or second mortgages if they did not receive important disclosures required by the Truth in Lending Act (TILA).
[IMAGE] [COLUMN_BREAK]The amicus brief - or ""friend of the court"" - was filed before the Tenth Circuit Court of Appeals in Denver to ensure proper implementation of statutes allowing certain borrowers to rescind on their loans if they notify the lender of their intent to cancel within three years of signing the loan.
""We are committed to making sure that borrowers can exercise their rights to the full extent allowed under this law,"" said CFPB Director Richard Cordray. ""The consumer's right to cancel gives lenders a powerful incentive to provide the disclosures that consumers need to make good financial choices.""
The CFPB was granted by Congress the authority to implement and interpret TILA in July 2011.
The act requires lenders to disclose information such as annual percentage rates and finance charges when borrowers decide to take out second mortgages. Under TILA, if this information is not given to borrowers, they can back out of the loan within three years.
If a borrower decides to cancel a loan, the lender must release its liens against the borrower's home, and the borrower must return the loan. If the lender does not cancel the loan, the courts can determine whether the borrower had the right to rescind.
