Jesinoski v. Countrywide Home Mortgage

Posted: May 22, 2015 by beguide in case summaries, Real Property
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JESINOSKI V. COUNTRYWIDE HOME LOANS FULL OPINION

WHAT HAPPENED: The Jesinoskis refinanced their home in 2007 and sought to cancel the transaction in 2010.  Countrywide, who was the bank that gave them the mortgage in 2007 said no.  Pretty open and shut case, right?

WHY IS THIS BEFORE THE SUPREME COURT: Not so fast!!  As apart of every mortgage transaction, borrowers are required to receive a three day right of rescission notice on the day of closing.  If the borrowers do not receive the notice, it becomes a three year right to cancel.  The Jesinoskis are the kind of intrepid homeowner who are trying to use Federal Law to pay off their mortgage.  Countrywide, on the other hand, is trying at all costs to stop this from happening and are arguing that the Jesinoskis had to file a lawsuit before they could rescind their loan.

WHAT WAS THE RULING: The Court ruled unanimously that the Jesinoskis were allowed to rescind their loan, even though they had not filed a lawsuit within the three year time period against Countrywide.  The Court further ruled that the regular rules regarding rescission, in that when something is rescinded you have to make the original provider of the product whole again by refunding what was first provided, may not apply in this case.  Therefore, the Supreme Court could be ruling that the Jesinoskis do not have to refund the loan after rescinding, which would be great for the Jesinoskis and horrible for whatever poor sap is servicing the loan at this point.

WHAT ARE THE RAMIFICATIONS OF THIS DECISION: Following the mortgage crisis in the mid-2000s, banks were given buy-outs to stay afloat, but the people who lost their homes had very few civil remedies to recoup the funds they lost in foreclosed houses and bad loans.  This ruling gives homeowners a significant avenue to bring suit against banks for predatory lending practices, and in the future, will likely give banks extra incentive to ensure borrowers receive the notice and are aware of their rights.

THE GOOD GUYS WON IF: you do not like banks, which if you’re reading this, is probably you.  So congrats.

THE BAD GUYS WON IF: you have sympathy for the American banking system, so wherever you are, my condolences.

WHO WAS RIGHT: The case was decided before the podcast was recorded, so both Brett and Nazim got it perfectly right.

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Comments
  1. […] week’s podcast covers Jesinoski v. Countrywide Loans, a case that deals directly with the mortgage crisis of the mid-2000s.  Brett and Nazim give […]

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