Charlene C. Bradford v. Josh Terry ET AL.

To avoid foreclosure, a homeowner and her daughter made a deal to sell their home. The purchasers paid off the mortgage and, after acquiring title, leased the home back to the daughter with an option to purchase. When the daughter failed to make timely lease payments, the purchasers sued for possession of the home. The (former) homeowner filed her own suit, alleging that the transaction was an equitable mortgage subject to rescission under the Federal Truth in Lending Act. She also alleged that the transaction violated Tennessee’s Foreclosure-Related Rescue Services Act. Following a trial, the court agreed that the transaction created an equitable mortgage that violated the Truth in Lending Act. So, under the federal act, the court rescinded the transaction and awarded damages and attorney’s fees. The court dismissed the claims under the Foreclosure-Related Rescue Services Act after determining it was inapplicable. On appeal, we conclude that the Foreclosure-Related Rescue Services Act, rather than the Truth in Lending Act, applied. We affirm the trial court’s rescission of the transaction under the state act. We reverse the awards under the Truth in Lending Act.