The mortgage lending industry is voicing deep concern about the potential impact of the Rodash decision, fearing it will create a new practice for attorneys and that other indus-try practices besides those uncovered in the case will come to light.
Members of the Savings & Community Bankers of Amer-ica attending the organizations convention in Orlando, Fla., said the Rodash line of decisions could imperil smaller insti-tutions forced to rescind even a few of their seasoned loans. Their only relief at this point would be from Congress, which is being pushed to pass legislation during a lame duck session in November nullifying the Rodash effect.
In Rodash, the 11th U.S. Circuit Court of Appeals held that a mortgage banker improperly disclosed under the Truth In Lending Act that the borrower was being charged $22 to expedite payoff of an existing loan. The court ordered the three-year right of rescission period to begin.