A Win at the Supreme Court for Consumers in Home Mortgage Case

A Win at the Supreme Court for Consumers in Home Mortgage Case 

Tony Mauro, Supreme Court Brief, January 13, 2015

The U.S. Supreme Court ruled unanimously in favor of consumers Tuesday, interpreting a federal law to allow homeowners up to three years to give notice to their banks that they want to rescind their mortgage loans.

The ruling in Jesinoski v. Countrywide Home Loans was one of two decisions issued Tuesday that had these common characteristics: unanimous, five pages long, interpreting federal statutes, and written by Justice Antonin Scalia, who is not always known for either coalition-building or brevity.

Scalia did not get to announce the cases from the bench, however. He was stuck in traffic, leaving the task to Chief Justice John Roberts Jr. Scalia arrived in time to hear the day's oral arguments, which began after opinions were announced.

In 2007, Minnesotans Larry and Cheryle Jesinoski refinanced their mortgage with Countrywide, and exactly three years later tried to rescind the loan in a letter to Bank of America Home Loans, which had acquired Countrywide during the housing finance crisis of the period.

In doing so, the Jesinoskis relied on the Truth in Lending Act, which gives borrowers the right to rescind a loan by "notifying the creditor" within three years after the transaction is consummated. But the Bank of America tried to block the rescission, and the U.S. Court of Appeals for the Eighth Circuit ruled in the bank's favor, finding that the borrower must actually file a lawsuit within three years, not just give notice.

The language of the law "leaves no doubt" that only notification and not litigation is required within three years, Scalia said....