A unanimous Supreme Court ruled Tuesday that home buyers don’t need to file a lawsuit, but may simply write a letter if they want to back out of a mortgage because they claim their lender violated the federal Truth in Lending Act.
The decision came in a case involving Larry and Cheryle Jesinoski, a Minnesota couple who refinanced their home in 2007 with Countrywide Home Loans, Inc., now part of Bank of America Corp. They claim the company failed to provide some disclosures required under federal law.
The couple sent a written notice of rescission within three years after the loan closed. But a federal judge ruled they should have filed a lawsuit instead. The 8th U.S. Circuit Court of Appeals affirmed.
Resolving a split among lower courts, the Supreme Court said written notice was enough.
Justice Antonin Scalia wrote for the court that the law says nothing about how a borrower exercises the right to rescind” within the three years allowed.
Scalia said the resolution of the case was simple because the Jesinoskis mailed the bank their notice before the three-year deadline. “This is all that a borrower must do in order to exercise his right to rescind,” he said.