U.S. Bank Nat’l Ass’n as Tr. v. Naifeh

In 2007, Naifeh and Ristic obtained a loan from WaMu for San Francisco property. WaMu provided a disclosure of the loan terms as required by the Truth in Lending Act (TILA, 15 U.S.C. 1601). After the borrowers defaulted, Naifeh sent letters, asserting that she and Ristic were rescinding the loan under “Regulation Z” (12 C.F.R. 226.33(b)) based on TILA disclosure deficiencies. A month before the scheduled foreclosure sale Naifeh caused several documents to be recorded with the county, purporting to show she owed nothing on the loan. Naifeh was present at the trustee’s sale, distributing notices representing that the trustee knew there were contrary claims to title. No one bid. A Trustee’s Deed was recorded, granting title to BofA. Naifeh continued to record documents. BofA filed suit, seeking cancellation of instruments and quiet title. The trial court held that Naifeh’s notice of rescission was insufficient. Because of a decision subsequently issued by the U.S. Supreme Court, the court of appeal vacated and remanded for adjudication of the rescission defense. A borrower may rescind the loan transaction under TILA without filing suit, but when the rescission is challenged, a court may decide whether the notice was timely and whether the TILA procedure should be modified in light of particular circumstances. View "U.S. Bank Nat'l Ass'n as Tr. v. Naifeh" on Justia Law