Borrower Need Not File Suit

Third Circuit holds notice of rescission sufficient to rescind loan under Truth in Lending Act

, New Jersey Law Journal


In a precedent-setting decision that could have widespread implications for lenders, the Third Circuit has ruled that a rescission action, filed by borrowers more than three years after the closing on their loan, was timely. The court held that a borrower's sending of a notice of rescission to the lender within the statutory required three-year period is all that is required to exercise the right to rescind under the Truth in Lending Act. Sherzer v. Homestar Mortgage Services.

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