Supreme Court: To Rescind Mortgage, a Letter Can Suffice

The Supreme Court ruled today that homeowners can back out of mortgages by writing a letter to the lender.

The unanimous ruling was in favor of Larry and Cheryle Jesinoski, a Minnesota couple who sued Countrywide Home Loans, Reuters reports. Countrywide, now owned by Bank of America, had refused to rescind the couple's $611,000 mortgage, claiming that the Jesinoskis were required to file a lawsuit in order to rescind the mortgage, which they had failed to do by the statutory deadline.

High Court Sides With Circuit Court Minority

Under the federal Truth in Lending Act, a borrower has three years to rescind a mortgage if a lender fails to make required disclosures. However, the borrower must give the lender notice within three years of entering into the agreement.

Five circuit courts -- including the court that heard the Jesinoskis' appeal of a lower court ruling in Countrywide's favor -- ruled that "notice" requires the homeowner to file a lawsuit. But the Supreme Court sided with the three other circuit courts in holding that the Jesinoskis' letter was enough to satisfy the Act's "notice" requirement.

The language of the act "leaves no doubt that rescission is effected when the borrower notifies the creditor of his intention to rescind," Justice Antonin Scalia wrote in the Court's opinion, noting that "the statute does not also require him to sue."

Supreme Court: To Rescind Mortgage, a Letter Is All You Need by FindLaw