[Paul M.]

In general, filing a suit does not mean you get to stop paying your mortgage. If a person wins suit for rescission, the lender pays that money back at the end of the suit. A law suit for rescission should be brought against the current note holder. That is, the original lender, if no longer solvent, is sort of off the hook from the borrower. A borrower can sue the current lender, and the current lender can in turn sue the lender who sold them the "bad" note.

If a lender forecloses during a lawsuit for rescission, and the court later rules in the borrower's favor, then the monetary damages just increased by quite a bit. An injunction should be sought when a rescission case is filed asking that the lender be enjoined from foreclosing on the subject property during the law suit. A lis pendens could also be used to keep the property around until the end of the suit.

- Paul