Cheshire Mortgage Service, Inc. v. Luis A. Montes

Summary

The Supreme Court of Connecticut reversed a judgment of strict foreclosure and the rejection of the borrowers' counterclaims, holding that although the two second mortgage loans were not unconscionable, the lender violated the federal Truth in Lending Act by failing to disclose and include fees for recording a future assignment of the mortgage in the finance charge, violated General Statutes § 36-224l by charging a prepaid finance charge of approximately eleven percent of the loan principal, and thereby engaged in an unfair trade practice under CUTPA. Because the remedies for those violations were neither considered below nor briefed on appeal, the court remanded for the trial court to determine the borrowers' rights and remedies and their effect, if any, on foreclosure. Justice Berdon concurred in the TILA, § 36-224l, and CUTPA rulings but dissented as to unconscionability, concluding that the cumulative effect of the loans was unconscionable and that a valid rescission would void the mortgage.