Reverse Mortgage IllinoisIllinois reverse mortgage
Sections 1601 et sqq. of the US Securities and Exchange Commission's Securities and Exchange Commission's Federal Truth in Lending Act (TILA). However, the court also found that, since the disclosure was not made available to the property fund fiduciary, the three-day right of revocation was prolonged to three years after the date of the acquisition and the fiduciary exercise this right in a timely manner.
Furthermore, the Court ruled that the Trustee's right to legal compensation was not time-barred. As of July 2009, a borrower received a reverse mortgage backed by his special ownership entity and owned by a real estate fund of which he was the recipient. There was a usual relief provision in the mortgage which provided that the fiduciary was not obliged in person on the mark "and the only way to enforce a lien by the ownership itself".
Even though the credit documentation, as well as the revocation instruction requested by TILA (15 U.S.C. 1635(a)), was drawn up for the mortgage holder, they were only supplied to the borrower/trust recipient. In May 2010, the borrower/trust recipient passed away, and in October 2010, the mortgage creditor sues for execution.
During June 2011, the Respondent Trustee sent a written notice to the Claimant Creditor claiming to have exercised its right to withdraw from the Deal. The respondent / fiduciary submitted a counter-claim under TILA in July 2011 in which he demanded avoidance, cancellation of the rights of way, legal damage and attorneys' costs. The County Tribunal rejected the counter-claim with prejudgment in January 2012.
Soon thereafter, the defendant/trustee repaid the mortgage creditor the full amount due under the notes and the mortgage and then ended the confidence by transferring the pledged assets to a third person. Then the mortgage creditor willingly rejected the enforcement suit and in March 2012 the judgement rejected the suit with prejudgment.
On appeal, the defendant/trustee dismissed his TILA action. However, the Appeals Tribunal confirmed the rejection of the counter-claim by the District Tribunal in a split view, arguing that the mortgage relief provision had the effect that the borrower/beneficiary, not the fiduciary, was the "debtor" and that the borrower/beneficiary was therefore the only individual authorised to withdraw under TILA.
Though neither the TILA nor its executive order no. 1 defines the "debtor", the Appeals Tribunal, following the definitions of the lexicon, found that the debtor is "the individual on whom the loan is granted" and, since the fiduciary was not the debtor, it could not assert any facts on the basis of which it had the right to reverse the operation.
Also, the Appeals Tribunal ruled that the fiduciary lost his right to legal compensation because he did not bring the matter up in the appeals. Thereupon, the ECJ analysed the two rules in the official's commentary on Regulation Z relating to foundations, both of which stipulate that, for the purpose of the concept of'consumer', credits granted to a foundation are deemed to be granted to a physical being.
Since " [t]he fiduciary of the property fund is a private individual whose title is secured," the tribunal found that the fiduciary "was eligible for TILA notices and has the right to reverse the transaction," which overturns the position of the Appeals Tribunal to the opposite effect. Lastly, the Supreme Tribunal of Illinois has raised the Trustee's claim that he is legally liable for compensation under TILA.
Given that the Trustee sent the letter of resignation in June 2011, the claimant did not reply and the Trust submitted his cross action in July 2011, the "Trustee's right to legal compensation within one year after the infringement occurred" as claimed by TILA, 15 U.S.C. § 1640(e) was asserted.
Case was set aside by the Appeals Tribunal and referred back to the Local Tribunal for further prosecution.