In the wake of the recent U.S. Supreme Court ruling that allows borrowers to skip courts when filing rescission actions, Locke Lord Partner Simon Fleischmann provided an analysis on the issue for readers of The American Banker
and National Mortgage News
. Fleischmann anticipates an increase in "frivolous" rescission notices because before the Court’s decision costs associated with a borrower filing a lawsuit limited rescission bids, but that is no longer a restraint. "When a lawsuit is required, there is a filing fee and there is an obligation by the borrower to certify that they are making a pleading in good faith and upon a reasonable investigation. That tends to weed out a lot of truly frivolous claims," Fleischmann said. "Without that mechanism in place, anyone can send a letter and assert a rescission demand. I think more people will do that."
Fleischmann, who is based in Locke Lord’s Chicago office, can be reached by email at email@example.com or by phone at (312) 443-0462.