The Supreme Court has ruled that under the Truth in Lending Act, borrowers can rescind their mortgages within three years if they have not been provided with required disclosures. All the borrower needs to do to rescind the loan is to notify the bank. The bank had argued that the borrower had to sue within three years in the event that there was a dispute between the bank and the borrower concerning the disclosures. The right to rescind is thought to be an important consumer protection against abusive lending practices. Borrowers requesting a rescission are required to pay back any amounts loaned.
AS with the investigation over its mortgage servicing practices in New York, California is taking a hard line against OCWEN for its alleged failure to provide requested documents. California’s Department of Business Oversight was investigating OCWEN’s mortgage servicing practices and has filed civil charges in state administrative court to suspend OCWEN’s license to do business in the state. OCWEN does more business in California than in any other state.