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Illinois Supreme Court Expands Who Can Seek TILA Rescission

Interesting blog post discussing how the Illinois Supreme Court has issued a decision allowing the trustee of a reverse mortgage to rescind the loan after a foreclosure action had been filed. This case important as it could be cited as persuasive authority by homeowners in other States, including California.

rogerrinaldi

Last Updated: March 3 2016

Article by Elizabeth S. McCall  Reed Smith

A recent Illinois Supreme Court opinion may expose banks to a flood of TILA rescission claims by anyone who claims an ownership interest in mortgaged property.  The state supreme court ruled that the right to rescind includes “each consumer whose ownership interest is or will be subject to the security interest” or “is subject to the risk of loss.” Financial Freedom Acquisition v. Standard Bank & Trust Co. et al., 2015 IL 117950 (9/24/2015), rehearing denied, OneWest Bank N.A. v. Standard Bank & Trust Co., et al., (11/23/2015.

The Financial Freedom decision permitted the trustee for a reverse mortgage to rescind the loan signed by the deceased borrower after a foreclosure action had been filed.  More recently, an appellate court relied upon theFinancial Freedom decision to reverse the dismissal of a TILA claim by…

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