Commentary and analysis of the possibility of classwide litigation over bad subprime mortgage loans under the federal Truth in Lending Act. This article discusses TILA’s various provisions as they intersect with class action procedure, and TILA’s limitations on remedies and monetary recoveries. The article focuses on various federal court decisions holding that the Truth in Lending Act’s provision for a rescission remedy does not authorize bad mortgage claims to be maintained in a class action. The Seventh Circuit additionally has staked out the extreme position that such claims are not suitable for certification either as a Rule 23(b)(2) action for declaratory relief, or alternatively under Rule 23(b)(3) in an action for damages. Finally, the article examines two federal court decisions where claimants have permitted TILA rescission cases.
Linda S. Mullenix, Complex Litigation: Mortgage Rescission, National Law Journal, November 10, 2008, at 16.