New York Federal Court Rejects Borrower’s TILA Claims

The United States District Court for the Eastern District of New York recently dismissed a borrower’s complaint that alleged, among other claims, violations of the Truth in Lending Act (“TILA”).  See Ledgerwood v. Ocwen Loan Servicing LLC, No. 15 CIV. 1944 (BMC), 2015 WL 7455505 (E.D.N.Y. Nov. 21, 2015).  In the case, the plaintiff purchased a home in 2006, and the originating lender assigned the loan to a trust pursuant to a Pooling and Servicing Agreement.  Among her many allegations, the plaintiff claimed that she had no notice of this assignment in violation of TILA’s Regulation Z amendments, which require that consumers receive notice within 30 days if their mortgage loan is “sold, assigned or otherwise transferred.”  12 C.F.R. 226.39.  She also claimed that the lender never informed her that the loan would be securitized, in violation of TILA’s disclosure requirements, and that she should be allowed to rescind.  See 15 USC 1635.  The defendant servicer filed a motion to dismiss, arguing (i) Regulation Z was amended in 2009 to require these disclosures and did not apply retroactively to the plaintiff’s 2006 closing; (ii) TILA’s right of rescission does not apply to transactions used to finance the acquisition of a dwelling, such as the transaction at issue here;  and (iii) the claims were outside TILA’s statute of limitations, which is three years for the rescission claims and one year for the others.  The Court agreed and granted the motion to dismiss based on all of the arguments made by the defendant.  The Court likewise dismissed the plaintiff’s claims of improper kickbacks under Real Estate Settlement Procedures Act (“RESPA”), finding that these were also outside that statute’s one-year statute of limitations.  See 12 USC 2614. For a copy of the decision, please contact Michael O’Donnell at