Complex Litigation: Mortgage Rescission
National Law Journal, Vol. 31, No. 10, p. 16, November 2008
5 Pages Posted: 9 Jun 2013
Date Written: November 10, 2008
Commentary and analysis of the possibility of classwide litigation over bad subprime mortgage loans under the federal Truth in Lending Act. This article discusses TILA’s various provisions as they intersect with class action procedure, and TILA’s limitations on remedies and monetary recoveries. The article focuses on various federal court decisions holding that the Truth in Lending Act’s provision for a rescission remedy does not authorize bad mortgage claims to be maintained in a class action. The Seventh Circuit additionally has staked out the extreme position that such claims are not suitable for certification either as a Rule 23(b)(2) action for declaratory relief, or alternatively under Rule 23(b)(3) in an action for damages. Finally, the article examines two federal court decisions where claimants have permitted TILA rescission cases.
Keywords: Class action litigation, sub-prime mortgages, Truth-in-Lending Act, TILA, rescission, damages actions
Suggested Citation: Suggested Citation