Can TILA violations actually stop a foreclosure?

Yes. A valid TILA rescission notice voids the lender's security interest and requires termination of foreclosure. Even a colorable TILA claim creates significant settlement leverage.

How do I know if my loan has TILA violations?

A forensic loan audit examines your loan documents for TILA violations — checking APR calculations, disclosure delivery, finance charge accuracy, and Notice of Right to Cancel compliance.

What is the 3-year extended rescission right?

If the lender failed to provide required material disclosures or the Notice of Right to Cancel, the rescission period extends to 3 YEARS from closing. Loans originated up to 3 years ago may still be rescindable.

TILA Violations Guide - Truth in Lending Act in Foreclosure Defense

What Is TILA and Why Does It Matter in Foreclosure?

The Truth in Lending Act (TILA), 15 U.S.C. § 1601 et seq., is a federal consumer protection law requiring lenders to clearly disclose loan terms before you sign. When lenders violate TILA — fail to disclose interest rates accurately, APR, finance charges, or payment schedules — you gain powerful legal rights, including the right to rescind (cancel) the loan entirely in certain cases.

The Right of Rescission (15 U.S.C. § 1635)

For most refinance transactions and home equity loans on your primary residence, you have a 3-day right to cancel. If the lender failed to provide required disclosures, this period extends to 3 YEARS. A valid rescission voids the security interest — meaning the lien on your home is eliminated and the foreclosure must stop. This is one of the most powerful tools in foreclosure defense.

Common TILA Violations

Finance Charge Understatement

If the lender understated the finance charge by more than $35 (or $100 for certain loans), TILA provides for rescission and statutory damages.

Failure to Deliver Required Disclosures

Lenders must provide specific disclosures — including the Truth in Lending disclosure statement and Notice of Right to Cancel. Missing these extends rescission to 3 years.

APR Disclosure Violations

If the disclosed APR is inaccurate beyond the tolerance, you may have a rescission claim. A forensic loan audit can identify APR discrepancies.

Payment Schedule Errors

Missing or inaccurate payment schedules in loan documents can constitute a TILA violation. These are surprisingly common in older or complex loan products.

Statutory Damages Under TILA

TILA allows for actual damages, statutory damages (up to $4,000 for individual actions), and attorney's fees. In a successful TILA claim, the lender pays your attorney's fees — making this a powerful settlement lever. The threat of a valid TILA rescission claim often brings lenders to the negotiating table for a favorable modification or settlement.

TILA Violations: Powerful Leverage in Foreclosure Defense