Dirk Beukes v. GMAC Mortgage, LLC
786 F.3d 649
| 8th Cir. | 2015Background
- Dirk and Gesina Beukes refinanced their home with Homecomings Financial on September 28, 2007; the lender disclosed a finance charge at closing.
- The Beukeses later alleged the disclosed finance charge understated the actual charge by $944.31.
- They mailed a notice of rescission to the lender and its successor GMAC on January 21, 2010. GMAC declined to rescind.
- MERS initiated nonjudicial foreclosure by publishing notice on March 18, 2010, and purchased the property at a May 2010 foreclosure sale.
- The Beukeses sued in November 2010 seeking rescission under the Truth in Lending Act (TILA), 15 U.S.C. § 1635, and damages under § 1640; the district court granted summary judgment for defendants.
- The Eighth Circuit held the appeal pending Jesinoski v. Countrywide; after Jesinoski, the court affirmed on an alternative ground.
Issues
| Issue | Plaintiff's Argument | Defendant's Argument | Held |
|---|---|---|---|
| Whether the Beukeses’ rescission right expired under TILA § 1635(f) before they acted | Beukes: mailing a rescission notice on Jan 21, 2010 exercised rescission within 3-year statutory period | Defendants: right expired three years after consummation (Sept 2007) so rescission was untimely | Court: Jesinoski confirms mailing suffices; Jan 2010 notice was within 3 years, so § 1635(f) did not bar rescission at that time |
| Whether the lender’s disclosed finance charge was “accurate” so that rescission expired after 3 business days under § 1635(a) | Beukes: disclosed charge understated actual charge by $944.31 — inaccurate under the tighter tolerance applicable to post-foreclosure rescissions | Defendants: disclosure was within the general tolerance for refinancings (½% of credit = $1,235) because the notice predated foreclosure; § 1635(i)(2)’s $35 tolerance applies only after foreclosure initiation | Court: § 1635(i)(2) applies only to rescissions after foreclosure initiation; because Beukes’ notice preceded foreclosure, the broader § 1605(f)(2) tolerance governs and disclosure was accurate, so rescission expired after 3 business days |
Key Cases Cited
- Jesinoski v. Countrywide Home Loans, Inc., 135 S. Ct. 790 (2015) (borrower exercises TILA rescission by notifying creditor; filing suit not required to effect rescission)
- Ruiz v. 1st Fid. Loan Servicing, LLC, 829 N.W.2d 53 (Minn. 2013) (describing initiation of nonjudicial foreclosure under Minnesota law)