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Home >> Lending >> Home Mortgage
Rescinding a Fraudulent Loan
I took out a loan in 2007, and recently found out that the lender balloned my income by three times on my loan application, creating an intentional effort to fraud. Yet, when I applied for a loan modification, the lender said I was turned down due to "insufficient income". As my social security income hasn't changed since taking out this loan, I obviously would have had insufficient income when closing it. If the lender had used the ballooned estimates, I would have had sufficient income, but using my actual income, I would have had insufficient income, further proof of a fraudulent loan. I want to rescind this loan due to deceptive practices and I am concerned with the statute of limitations for doing this.
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 The fact that the lender may have created a false entry on your application, which you likely signed, is not a condition of rescission under federal banking laws. You may have other recourse in court against the lender, but if you rescind, are you prepared to return the loan proceeds?
Rescinding doesn't mean the lender cancels the lien and you get to keep the loan proceeds. It means that the loan is reversed completely.
Published on BankingQuestions.com 4/16/10
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