Federal Ninth Circuit Court of Appeal’s Major Home Owner Ruling


Truth in Lending Act / Real Estate Settlement


Practices Act


The panel reversed in part and vacated in part the district

court’s dismissal pursuant to Federal Rule of Civil Procedure

12(b)(6) of an action under the Truth in Lending Act and the

Real Estate Settlement Practices Act against Countrywide

Financial Corporation and various other defendants involved

in the plaintiffs’ residential mortgage.

The panel reversed the district court’s dismissal of the

plaintiffs’ TILA rescission claim for failure either to tender

the rescindable value of their loan prior to filing suit or to

allege ability to tender its value in their complaint. Declining

to extend Yamamoto v. Bank of New York, 329 F.3d 1167 (9th

Cir. 2003), the panel held that an allegation of tender or

ability to tender is not required. The panel held that only at

the summary judgment stage may a court order the statutory

* The Honorable William E. Smith, District Judge for the U.S. District

Court the District of Rhode Island, sitting by designation.

** This summary constitutes no part of the opinion of the court. It has

been prepared by court staff for the convenience of the reader.

Case: 09-17678 07/16/2014 ID: 9170559 DktEntry: 129-1 Page: 2 of 38


sequence altered and require tender before rescission, and

then only on a case-by-case basis, once the creditor has

established a potentially viable defense.

The panel vacated the district court’s dismissal of the

plaintiffs’ claims under § 8 of RESPA, which prohibits

kickbacks and unearned fees, as barred by the one-year

statute of limitations. The panel held that although the

RESPA statutory limitations period ordinarily runs from the

date of the alleged RESPA violation, the doctrine of equitable

tolling may, in appropriate circumstances, suspend the

limitations period until the borrower discovers or had

reasonable opportunity to discover the violation. The panel

declined to address two issues of first impression:

(1) whether, while straight overcharges are not actionable

under RESPA § 8(b), markups for services provided by a

third party are actionable; and (2) whether an inflated

appraisal qualifies as a “thing of value” under RESPA § 8(a).



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