Wife of Borrower Authorized to Receive Truth in Lending Act Notices, Eighth Circuit Rules – Ofor v. Ocwen Loan Servicing

As Riverside County foreclosure defense lawyers, we were interested to read a case involving a man who attempted to rescind his mortgage under the Truth in Lending Act on the grounds that his then-wife, not he himself, received the required TILA notice. In Vincent Ofor v. Ocwen Loan Servicing et al., the federal district court dismissed Ofor's TILA claims as well as a claim that the mortgage was defective under Minnesota law. Both claims revolve around Ofor's absence during the closing of the loan; he was in New York for work and gave his then-wife power of attorney to handle the closing on his behalf. He has since divorced. The Eighth U.S. Circuit Court of Appeals affirmed, finding that neither the mortgage nor the TILA notice was fatally defective. Ofor was refinancing a Minnesota home with a loan balance of $218,000 on two mortgages. In part because of poor credit, he went through a loan broker and obtained two subprime mortgages. The closing was scheduled for October 25, 2005, but Ofor had to be in New York for a temporary job throughout October. He granted power of attorney to his then-life, Lisa Ofor. During the closing, the broker could not find the power of attorney, so he faxed another to Ofor, who signed it and faxed it back. In late November, the lender sent a package to the Ofors including a TILA notice with a right to rescind by December 7. Ofor made payments until September of 2006. In June of 2008, his attorney sent a rescission letter to Ocwen, lender Aames and assignee U.S. Bank. Ocwen denied the rescission claim, and U.S. Bank foreclosed in October of 2008. Ofor sued, arguing that the mortgage was defective because the power of attorney on file with the county was defective; it contained signatures on the same page from Ofor and the notary even though they were in different states and could not have signed in this way. He also argued that he did not receive the required TILA notice because it was only given to Lisa. The trial court dismissed both claims with prejudice, and Ofor appealed. The Eighth Circuit started with the mortgage defect claim. Under Minnesota law, documents affecting real estate must have parties' original signatures, which Ofor claims is impossible for the document on file, because it shows his signature on the same page as the notary's. In the event, he argued, his signature would have been faxed on a separate piece of paper. The form also required the notary to acknowledge that Ofor signed in the notary's presence, which he said was another impossibility. The Eighth disposed of this argument quickly, however, when it noted that Ofor had never made his argument at trial under the section of Minnesota law he now cites. Thus, the appeal was waived on that issue. Ofor had no better luck on his TILA claim. He argued that he did not receive the first Notice of Right to Cancel because it was given to Lisa at closing, and the second, addressed to him, arrived at his home before he was back from New York. However, Ofor conceded that the first Notice would be valid if Lisa had a valid power of attorney, and the Eighth concluded that the power of attorney was valid. The second Notice was not legally required at all, the court said. Thus, it upheld both rulings from the trial court. As Chino Hills foreclosure defense attorneys, we would like to emphasize a part of this case that is not dispositive: Ofor's failure to read the closing papers for months after the loan closed. He told the court that he didn't look at them as soon as he arrived in Minnesota because he had had a mortgage before and, by implication, he didn't think he'd see anything new. Loan closing papers are not light reading, but we believe it's vital for borrowers to read them at least well enough to ensure the loan terms are what they expect them to be. This may also have helped Ofor if he had been able to read the papers within the three-day rescission period, since he alleges he was sold two loans when he thought he was buying one. Our Los Angeles foreclosure defense lawyers scrutinize loan documents after the fact for fraud or "bait and switch" tactics, but you can sometimes save heartache by keeping an eye open early.

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