Chain of Title - Federal Law HOEPA and TILA?
I have a homeowner who is willing to sell me her property. It's a 4/2 approx 1200 sq ft on a 10,300 sq ft lot. Nice view in Northern California. She's behind $40k (has only paid one pymt of $2250 since 11/01 about a year and a half) The property is valued in the range of $350-400K. She owes $288k and wants $20K to walk.
Now, she's been fighting with the bank b/c she feels that the broker jacked up the price and made $21,000 on her. He probably charged her 21 pts which she feels is usuary. Anyway, the bank says their note was done in good faith and it still stands. She is willing to sell me the property, but at the same time wants to sue. She talked with an atty who told her something about she might have the right to cancel the loan based on violations of two federal laws called HOEPA and TILA.
My question - Is anyone familiar with these two laws and can you let me know what you think about all this. And, the atty also sent her a copy of the Title History and it shows every loan she took out on the property. When I went to the Recorder's office I did not find a Notice of Reconveyance for a loan done back in 1999 for $139,500, but four months later she took out another loan with the same bank for $160k. Is it possible that the bank covered the 1st loan but forgot to send the reconveyance? 
[addsig]
HOEPA =
Home Ownership and Equity Protection Act is a federal (national) law that provides special protection to homeowners when they obtain home mortgage loans at high interest rates or with fees exceeding 8% of the loan amount.
TILA=
Truth In Lending Act is a federal law that requires that most lenders, when they make a loan, provide standard form disclosures of the cost and payment terms of the loan.
Thanks for the Info. Is there a website that I can look up that would go into detail how these affect the CA marketplace?
Do you think the bank would be willing to do a short sale?
Any comments would be appreciated
The "Bank?" Absolutely not. The first mortgagee enjoys a 20% LTV. The USDA insured 2nd probably won't, either.
They'll buy out the foreclosing 1st, and recast the entire balance at 1% or 0%.
So, as you are prequalifying a candidate for a short sale, a Section 502 should raise a red flag.
My take on it is..... The property is badly damaged. There is no 2nd position loan in place.
What is a Section 502?
Gee. My response to you didn't make sense at all, did it? Section 502 has nothing to do with your question, but was in response to another question posted elsewhere.
Maybe I 'short' circuited.
No it didn't. Can you elaborate?
The Section 502 response should have been directed to another posted question, but was mistakenly attached as a response to your question. I can't explain why that happened.