the homeowners did not commence a
lawsuit seeking rescission within three
years after the loan was consummated.
However, the 8th Circuit held that the
fact the rescission claim was time-barred does not mandate the conclusion
that statutory damages for failure-to-rescind necessarily fail. The court
held that the statutory damages claim
was not time-barred under 15 U.S.C.
§1640(e) because the one-year statute
of limitations did not begin to run
until the lender was legally obligated
to respond to the homeowners’ notice
of intent to rescind, which was 20 days
after the homeowners gave notice.
Because the lawsuit was filed within
one year after the lender was legally
obligated to respond to the notice,
the statutory damages claim was not
time-barred. Bank of America, N.A. v.
Peterson, 746 F.3d 357 (8th Cir. 2014).
n Statute of Frauds; Negligent
Estoppel. Homeowners stopped paying
their mortgage payment and the lender
commenced foreclosure proceedings.
Homeowners applied to lender for a
loan modification. Homeowners allege
that they had a telephone conference
with a representative of the lender that
told them the lender had received all
the necessary documentation to consider
the loan modification request and that
the scheduled sheriff’s sale would be
canceled. However, the lender went
forward with the sale and was the high
bidder. Homeowners commenced action
claiming negligent misrepresentation
and promissory estoppel and the lender
removed to federal court on diversity
jurisdiction. The district court dismissed
the complaint because the alleged
agreement was not in writing and,
therefore, barred by the Minnesota
credit agreement statute, which requires
credit agreements to be in writing.
The 8th Circuit affirmed and
held that a claim of negligent
misrepresentation is an action on
a credit agreement and may not be
maintained unless the credit agreement
purportedly arising from the alleged
misrepresentation is in writing. The
8th Circuit also held that homeowners’
equitable estoppel count was really a
claim for promissory estoppel because
it sought to enforce the lender’s alleged
oral promise to cancel the sheriff’s sale,
which is barred by the Minnesota credit
agreement statute because the alleged
promise was not in writing. Bracewell
v. U.S. Bank Nat. Ass’n, ___F.3d___,
2014 WL 1356850 (8th Cir. 2014).
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