The Truth in Lending Act gives homeowners powerful rights — including the right to rescind certain loans. Learn how TILA violations can be used to stop foreclosure and create settlement leverage.
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These numbers could fundamentally change your foreclosure defense strategy. Know your TILA rights.
standard right of rescission period after closing
extended rescission window if required disclosures were never provided
maximum statutory damages per individual TILA action
minimum finance charge understatement threshold triggering rescission rights
"A valid TILA rescission voids the security interest — eliminating the lien on your home. That's not just a defense. It's game-changing."
Lenders routinely make errors in loan disclosures — and every violation is a potential legal weapon in your foreclosure defense.
If the disclosed APR is off by even a small percentage, it can constitute a TILA violation and create rescission grounds.
Violation of 15 U.S.C. § 1638Understating the finance charge by even $35+ is a TILA violation that extends your rescission rights.
Rescission triggerNo Truth in Lending statement or Notice of Right to Cancel at closing? 3-year rescission window begins.
Extends rescission to 3 yearsIncorrect payment schedules in loan documents are surprisingly common — and each is a potential TILA claim.
Common in complex loans
Most homeowners have no idea their loan documents contain TILA violations. A forensic loan audit examines your paperwork for APR errors, finance charge miscalculations, missing disclosures, and rescission grounds.
Under 15 U.S.C. § 1635, a valid rescission voids the entire transaction — including the security interest that gives your lender the right to foreclose. When you properly exercise your right to rescind, the lender must:
Terminate the security interest
The mortgage lien on your home is voided
Stop the foreclosure immediately
The lender loses its right to sell your home
Return all fees and payments
Under Reg Z rules for rescission accounting
TILA isn't just about stopping foreclosure — it can also be a financial recovery. Here's what you may be entitled to.
maximum statutory damages for individual TILA actions
damages covering overpayments, fees, and prejudice from violations
attorney's fees must be paid by the lender in successful TILA claims
TILA violations can void your loan, eliminate the lien on your home, and stop the foreclosure entirely. But you need to know what to look for. Our forensic loan audit is the first step toward uncovering violations that can save your home.
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. TILA is implemented through Regulation Z (12 CFR Part 1026), which sets forth detailed disclosure rules. 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.
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.
If the lender understated the finance charge by more than $35 (or $100 for certain loans), TILA provides for rescission and statutory damages.
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.
If the disclosed APR is inaccurate beyond the tolerance, you may have a rescission claim. A forensic loan audit can identify APR discrepancies.
Missing or inaccurate payment schedules in loan documents can constitute a TILA violation. These are surprisingly common in older or complex loan products.
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.
Our forensic loan audit can identify TILA violations that may provide grounds to stop foreclosure.
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