WASHINGTON – A unanimous Supreme Court says home buyers don't need to file a lawsuit, but may simply write a letter if they want to back out of a mortgage because they claim their lender violated the federal Truth in Lending Act.
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The ruling Tuesday came in a case involving a Minnesota couple who refinanced their home in 2007 with Countrywide Home Loans, Inc., now part of Bank of America Corp. They claim the company failed to provide some disclosures required under federal law.
The couple sent a written notice of rescission within the three-year statute of limitations, but a federal judge ruled they should have filed a lawsuit instead. The 8th U.S. Circuit Court of Appeals affirmed.
Resolving a split among lower courts, the Supreme Court said written notice was enough.