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.
Rush response within 24 hours
Rush response within 24 hours
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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