Business Law Critical Thinking Group Assignment.

Mr. and Mrs. Jones owned a home that went into foreclosure. During this time, they received a brochure from Rees-Max that read: “There are only a few months to go in your redemption period! Your options to save the equity in your home are fading. Call me immediately for a no-bull, no-obligation assessment of your situation. Even if you have been ‘promised’ by a mortgage broker or investor that they will help, CALL ME . . . .” The Joneses contacted Rees-Max, and they entered into an agreement. Rees-Max would buy the property from the Joneses, the Joneses would lease the property for a few months, and then the Joneses would purchase the property back from Rees-Max on a contract for deed. The agreement did not use the terms debt, security, or mortgage, and the documents stated that no security interest was granted. The Joneses property was appraised at

$278,000 and purchased by Rees-Max for $214,000 with more than $30,000 in fees. When the Joneses complained about the fees, Rees-Max started eviction proceedings.

1. The first group will use the chapter materials to identify what type of transaction the Joneses entered into with Rees-Max.

2. The second group will determine whether this transaction constituted a mortgage that would receive TILA and HOEPA protection. Do the Joneses have any right to complain about the fees? Why or why not?