Sunday, March 9, 2008

TILA Violation, Disclosure Statement Did not Explicitly State Payment Period

Hamm v Ameriquest Mortg. Co., ___ F.3rd ___, 2007 WL 3010973 (C.A.7 (Ill.)). Borrowers claims Lender violated TILA by failing to state explicityly the payment period in the TILA disclosure statements. Also asserted that one-week rescission right notice with three-day rescission right notice violated TILA. Disclosure statement don't say that payments will be made over 360 month period. But do set forth 359 and l.

Reg Z and FRB Staff Commentary. Deference appropriate unless demonstrably irrational. TILA requires that lender include the number, amount, and due dates or period of payments scheduled to repay the total of payments in disclosure statement. 15 USC 1638(a)(6). 12 CFR section 226.18(g)(). Hyper-technicality reigns with TILA. But opther circuits do not hold so. See, e.g. Santos-Rodriguez v. Doral Mortgage Corp., 485 F.3d 12 (1st Cir. 2007). Meaningful disclosure describes a balance between competing considerations of complete disclosure and the need to avoid informational overload.

Lender committed technical TILA violation by failing to explicitly state the payment period on the disclosure statement. States 360 payments but doesn't state monthly. Didn't mention monthly nature of payment.
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