Alert
Close

Take AARP’s Smart Driver course and you could save money on your car insurance. Learn more

Highlights

Open
AARP Real Possibilities

 

FREE FUN!

AARP Games - Play Now!

Contests and
Sweeps

Safe Driving in 2014 Sweepstakes

Learn how AARP Driver Safety can help you stay safe—and enter for a chance to win $1,000. See official rules. 

AARP Auto Buying Program

MOST POPULAR

Viewed

Hear Ye! Hear Ye!

The Case of the Bad Home-Loan Deal

Should a mortgage company refund processing fee to customers after a costly home refinance?

Weintraubs vs Quicken Loans - The homeowners were entitled to only the small refund originally offered.

The Weintraubs lost their lawsuit. — Michael Hirshon

The verdict

The Court of Appeals for the 4th Circuit reviewed the decision of the district court, acknowledging that the TILA allows a loan deal to be rescinded where there is a "consumer credit transaction." The court also noted that the Weintraubs define a "consumer credit transaction" as any situation where two or more parties begin negotiations that could lead to extending credit.

While the court agreed that the paying of the $500 fee was a transaction, they did not agree that it was a transaction for credit. According to the court, there is no consumer credit transaction unless the loan deal is closed and credit has been extended to the borrowers. If the court allowed the Weintraubs to rescind prior to getting the loan, potential borrowers would have a right to a free application for home financing. Lenders would end up bearing all the costs of credit reports and appraisals, regardless of whether the borrower intended to close the transaction.

Barry Weintraub said he brought his suit because unscrupulous lenders lure consumers with false promises, and then make it difficult to back out of the loan without losing money on the fees. Weintraub refinanced a year later for a better interest rate. At closing, Weintraub's fees ended up being less than his brick-and-mortar lender had estimated.

You may also like: Top mistakes that hurt your credit score. >>

Robin Gerber is a lawyer and the author of  Barbie and Ruth: The Story of the World's Most Famous Doll and the Woman Who Created Her.

Topic Alerts

You can get weekly email alerts on the topics below. Just click “Follow.”

Manage Alerts

Processing

Please wait...

progress bar, please wait

Tell Us WhatYou Think

Please leave your comment below.

Today's News

Discounts & Benefits

From companies that meet the high standards of service and quality set by AARP.

Downloadable mobile app from AARP® Roadside Assistance from Allstate.

AARP Credit card from Chase

Members can earn 3% cash back on purchases with the AARP® Credit Card from Chase.

Member Benefits

Join or renew today! Members receive exclusive member benefits & affect social change.