Technicality doesn't cancel loan

Law of the Land

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In the case of Melfi v. WMC Mortgage Corp., et al., the borrower refinanced his home mortgage with the lender. At closing, the lender provided the borrower with a notice of borrower’s right to rescind the transaction within three business days, as required under the Truth in Lending Act (TILA).

The lender utilized the Federal Reserve Board’s model form of notice, but left both the blanks for the date of the transaction and the actual rescission deadline blank, although the date of the transaction was stamped on the upper right corner of the form.

Under TILA, an improper notice of right to rescind extends the rescission period from three business days to three years following closing.