BEACH v. OCWEN FEDERAL BANK

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Case Basics
Docket No. 
97-5310
Petitioner 
Beach
Respondent 
Ocwen Federal Bank
Advocates
(Argued the cause for the petitioners)
(Argued the cause for the respondents)
Tags
Term:
Facts of the Case 

David and Linda Beach refinanced their Florida house in 1986 with a loan from Great Western Bank. In 1991, they stopped making mortgage payments. In 1992, Great Western began foreclosure proceedings. While the Beach's acknowledged their default, they alleged that the bank's failure to make disclosures required by the Truth in Lending Act gave them the right under federal law to rescind the mortgage agreement. The Florida trial court rejected that defense, holding that any right to rescind had expired in 1989 under federal law which provides that the right of rescission shall expire three years after the loan closes. The state's intermediate appellate court affirmed, as did the Florida Supreme Court.

Question 

Can homeowners who face foreclosure rescind a mortgage loan on the ground that the lender violated the federal truth-in-lending law?

Conclusion 
Decision: 9 votes for Ocwen Federal Bank, 0 vote(s) against
Legal provision: 15 U.S.C. 1635

No. In a unanimous decision, announced by Justice David H. Souter, the Court ruled no such defense could be raised after the three-year deadline of the federal Truth in Lending Act expires.

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BEACH v. OCWEN FEDERAL BANK. The Oyez Project at IIT Chicago-Kent College of Law. 26 November 2014. <http://www.oyez.org/cases/1990-1999/1997/1997_97_5310>.
BEACH v. OCWEN FEDERAL BANK, The Oyez Project at IIT Chicago-Kent College of Law, http://www.oyez.org/cases/1990-1999/1997/1997_97_5310 (last visited November 26, 2014).
"BEACH v. OCWEN FEDERAL BANK," The Oyez Project at IIT Chicago-Kent College of Law, accessed November 26, 2014, http://www.oyez.org/cases/1990-1999/1997/1997_97_5310.