The United States District Court for the District of Hawaii recently dismissed claims against defendants HomeStreet Bank and Penny Mac in a case that accused them of violations of the Truth In Lending Act ("TILA") and the Real Estate Settlement Procedures Act ("RESPA"). See Mathias v. HomeStreet Bank, Inc., 2021 WL 4484549 (D. Haw. 2021). In 2009, plaintiff took out a mortgage with HomeStreet to purchase a home. In November 2017, plaintiff met with a HomeStreet employee intending to pay off the amount due on his mortgage, but the employee convinced plaintiff to refinance his loan instead, and plaintiff signed a 30-year mortgage and note for $361,857 with HomeStreet in March 2018. Although the loan was initially signed on March 1, 2018, the "date of closing" for that loan was later updated to March 2, 2018, the date on which the mortgage was notarized. On May 3, 2019, HomeStreet informed plaintiff that his loan had been transferred to Penny Mac. Plaintiff filed this lawsuit on March 22, 2021 alleging that the defendant lenders violated TILA and RESPA by failing to provide him with the required material disclosures, including notice of his right to rescind, and seeking rescission of his loan under TILA and statutory damages under both TILA and RESPA. Defendants filed motions to dismiss arguing, among other things, that plaintiff's claims were barred by the statutes of limitations of both TILA and RESPA. The Court had previously dismissed plaintiff's initial complaint but granted him leave to amend to prove that his claims were within the statutes of limitations. Plaintiff's amended complaint pleaded the same facts as his initial complaint, but added facts concerning his neurological condition, claiming it was an "extraordinary circumstance" justifying equitable tolling.
Regarding the TILA rescission claim, the Court noted that TILA requires that, when a creditor fails to disclose the information required by subsection (a) of TILA, the borrower must assert his right to rescind within "three years after the date of consummation of the transaction or upon the sale of the property, whichever occurs first," either by instituting a lawsuit or by simply providing notice. The Court held that the "consummation date" was at latest March 2, 2018, and that plaintiff had not shown that he provided notice to defendant of his intent to seek rescission before his right to rescind expired. As to the plaintiff's claim for statutory damages under TILA and RESPA, the Court noted that both statutes imposed a one-year limit on damages claims, and that again, violations occurred at latest on March 2, 2018, and were thus time-barred.
As to equitable tolling, the Court evaluated plaintiff's claims under the standard that "a court may pause the running of a limitations statute in private litigation when a party 'has pursued his rights diligently but some extraordinary circumstance' prevents him from meeting a deadline.'" The Court acknowledged that a mental impairment may qualify as an "extraordinary circumstance," but rejected plaintiff's conclusory contention regarding his condition. It found that the complaint lacked specificity concerning the effects of plaintiff's impairment and the timing of that impairment, and that plaintiff was unable to demonstrate he "was unable rationally or factually to personally understand the need to timely file," or was "unable personally to prepare a [complaint] and effectuate its filing," and therefore found that equitable tolling was not adequately pled.
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