People are losing their homes every second. It’s a scary time for all of us and homeowners given risky loans are suffering greatly for the mishandling done by some mortgage lenders. Still…a class action suit doesn’t hold power in this particular arena. Recently, a federal appeals court has said the Truth in Lending Act does not allow for rescission of mortgages on a class action basis.

Joining an earlier ruling by the 1st and 5th circuits and one California state appellate court that have held that the TILA does not allow claims for rescission is the 7th U.S. Circuit Court of Appeals. A 2-1 decision on September 24, “averts the potential of significant damages for creditors accused of violating disclosure requirements in some of the exotic mortgage vehicles that caused the mortgage market meltdown.”

“This is a significant win for all lenders,” said Jeffrey W. Sarles of Chicago-based Mayer Brown. “Allowing thousands of class members to rescind their mortgages at one fell swoop would threaten lenders with intolerable liability.”

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