HOEPA Has a Comparable Rule for Section 32 Mortgages

[David A. Szwak]

The Home Ownership and Equity Protection Act [HOEPA], Title 15 U.S.C. sec. 1641[d], also makes assignees "subject to all claims ... that the consumer could assert against the creditor" and the legislative history of the provision suggests that it means just what it says. The Senate Report says that the provision subjects assignees "to all claims and defenses, whether under Truth In Lending or other law, that could be raised against the original lender" and "mirrors a rule promulgated by the Federal Trade Commission for 'consumer installment' loans." S.Rep. No. 103-69, at 28 [1994], reprinted in 1994 U.S.C.C.A.N. 1881, 1912; Pulphus v. Sullivan, 2003 WestLaw 1964333 [U.S.D.C. N.D. Ill. 2003]. Note: Dash v. Firstplus Home Loan Trust 1996- 2, 2003 WestLaw 1038355, at *10 [U.S.D.C. M.D. N.C. 2003] ["By its terms, section 1641[d] ... only affects ... the 'holder in due course' defense, which a defendant assignee might raise against the holder of their loan."].