Supreme Court clarifies rules for rescinding mortgages

WASHINGTON (AP) – A unanimous Supreme Court ruled Tuesday that 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.

The decision came in a case involving Larry and Cheryle Jesinoski, 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 three years after the loan closed. 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.

Justice Antonin Scalia wrote for the court that the law says nothing about how a borrower exercises the right to rescind” within the three years allowed.

Scalia said the resolution of the case was simple because the Jesinoskis mailed the bank their notice before the three-year deadline. “This is all that a borrower must do in order to exercise his right to rescind,” he said.

In a second unanimous opinion also written by Scalia, the court upheld a mandatory 10-year minimum prison term for a suspect who forces another person to accompany him during a bank robbery or in trying to elude police.

In the case before the court, defendant Larry Whitfield was fleeing police after a botched robbery at a credit union in Gastonia, North Carolina. He entered the home of 79-year-old Mary Parnell through an unlocked door. Once in the house, Whitfield encountered the frightened woman and guided her from a hallway to a computer room. There, she suffered a heart attack and died. A jury convicted Whitfield for forcing Parnell to accompany him in the course of evading arrest for a bank robbery, among other charges.

At issue was whether the distance traveled matters in figuring out whether the provision applies. Scalia said the several feet Whitfield and Parnell moved from one room to another was enough. Whitfield is serving a total sentence of 27 years.

Although he was the author of both opinions, Scalia was not on the bench Tuesday morning when the decisions were announced. Court spokeswoman Kathy Arberg said the justice was stuck in traffic between his suburban Virginia home and the court. Chief Justice John Roberts read summaries of both cases in Scalia’s absence.