Willie Causey, Jr. v. U.S. Bank National Association

MEMORANDUM

Willie J. Causey, Jr. appeals the district court’s grant of summary judgment for defendant U.S. Bank National Association on his Truth in Lending Act claim to rescind his mortgage refinancing loan with the defendant. Reviewing de novo, we reverse and remand. See Blue Lake Rancheria v. United States, 653 F.3d 1112, 1115 (9th Cir.2011).

It is undisputed that the plaintiff effectively invoked his absolute right to rescind the transaction within three business days of the loan closing. It is also undisputed that the lender ignored the plaintiffs rescission notice and proceeded to fund the loan. The district court erred in ruling that the plaintiff was required to tender the borrowed funds to the defendant before the defendant was obligated to release its lien. In an uncontested rescission as here, the default sequence under the Act requires the creditor to release its lien before the consumer must tender. See 15 U.S.C. § 1635 (b); 12 C.F.R. § 226.23 (d)(2)-(3).

Although the district court is authorized to modify the default sequence, that authority ends once rescission is accomplished. 15 U.S.C. § 1635 (b); 12 C.F.R. § 226.23 (d)(4). In a case where the creditor disputes…