Jesinoski v. Countrywide Home Loans, Inc.
Headline: Borrowers can cancel certain home loans by sending written notice within three years; Court rules a separate lawsuit is not required to effect rescission, affecting borrowers and lenders nationwide.
Holding: The Court held that a borrower who sends written notice to the lender within three years under the Truth in Lending Act has effectively rescinded the loan and need not file a lawsuit within that period.
- Allows borrowers to rescind qualifying loans by sending timely written notice within three years.
- Lenders must recognize timely written rescissions even if no lawsuit is filed during the three years.
- Borrowers may pursue court relief later once they have given timely written notice.
Summary
Background
Larry and Cheryle Jesinoski refinanced their home in 2007 and say the lender failed to give required disclosures. They mailed a written notice saying they were rescinding the loan exactly three years later. The lender refused to accept the rescission, and the Jesinoskis filed suit a year after that. The lower courts held the Truth in Lending Act requires a borrower to file a lawsuit within three years to rescind.
Reasoning
The Court considered whether the Act requires only written notice to the lender or also a lawsuit within three years. The statute says a borrower has the right to rescind "by notifying the creditor" of the intent to do so, and another provision just sets the three-year deadline for that right. The Court concluded the words show rescission is effected by timely written notice and that the statute does not require a court action within three years. Neighboring provisions and common-law rules do not change that result. Because the Jesinoskis mailed timely written notice, their rescission was effective and the courts erred in dismissing their claim.
Real world impact
People who meet the Act’s conditions can cancel qualifying loans simply by sending written notice within three years; they do not lose the right because they did not file suit immediately. Lenders must treat timely written rescissions as effective, and courts will handle disputes about relief after a timely notice was given. The case was sent back for further proceedings consistent with the opinion.
Ask about this case
Ask questions about the entire case, including all opinions (majority, concurrences, dissents).
What was the Court's main decision and reasoning?
How did the dissenting opinions differ from the majority?
What are the practical implications of this ruling?