May v. Suntrust Mortgage, Inc.

Plaintiffs refinanced their home in a mortgage loan transaction with Summit Mortgage. The mortgage was later assigned to Defendant, SunTrust Mortgage, Inc. Facing foreclosure, Plaintiffs filed for Chapter 13 bankruptcy. Plaintiffs filed an adversary proceeding against SunTrust in the pending bankruptcy case, seeking rescission of the loan transaction and damages. SunTrust filed a motion for summary judgment, arguing that because Plaintiffs filed their adversary complaint more than four years after the mortgage loan transaction, the defensive rescission-by-way-of-recoupment claim was barred by section 10(f) of the Massachusetts Consumer Credit Cost Disclosure Act (“MCCCDA”). In response, Plaintiffs asserted that the four-year statute of limitations did apply to their action because section 10(i)(3) of the MCCCDA allows for recoupment claims at any time. The United States Bankruptcy Court for the District of Massachusetts certified a question of law to the Massachusetts Supreme Judicial Court, which answered by holding that a borrower who grants a mortgage in a consumer credit transaction may not rescind the transaction under the MCCCDA defensively by way of common law recoupment after the expiration of the statute of limitations set forth in section 10(f) of the MCCCDA. View "May v. Suntrust Mortgage, Inc." on Justia Law