Penalties — Punitive Damages — Remedies — Limitations — Frivolous or Harassment Actions — Notice of Action

  1. Law
  2. Tennessee Code
  3. Banks and Financial Institutions
  4. Tennessee Home Loan Protection Act
  5. Penalties — Punitive Damages — Remedies — Limitations — Frivolous or Harassment Actions — Notice of Action

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  1. Except as provided in § 45-20-108, any lender found by a preponderance of the evidence to have violated this chapter shall be subject to the following:
    1. The making of a high-cost home loan that violates one (1) or more of the provisions found in § 45-20-103(1), (4)-(14), (16), (17), or (19)-(21), or § 45-20-106 is subject to the following penalties:
      1. Actual damages;
      2. For willful or intentional violations, statutory damages equal to the amount of all finance charges and fees paid by the borrower and forfeiture of the remaining interest under the loan; and
      3. Costs and reasonable attorney's fees;
    2. The collecting or servicing of a high-cost home loan that violates one (1) or more of the provisions in § 45-20-103(2), (3), (15), or (18), § 45-20-104, or § 45-20-106 is subject to the following penalties:
      1. Actual damages;
      2. For willful or intentional violations, statutory damages equal to the amount of all finance charges and fees paid by the borrower; and
      3. Costs and reasonable attorney's fees.
  2. Punitive damages may be awarded where the court finds that the violation is malicious or reckless. Punitive damages shall be limited to three (3) times the actual damages and the amount of all finance charges and fees paid by the borrower, exclusive of costs and reasonable attorney's fees.
  3. The loan may be reformed to effect the remedies provided in this section.
  4. The remedies provided in this section are not exclusive and are in addition to any other remedies available to a borrower under applicable law.
  5. Any action under this section shall be brought within three (3) years from the date the borrower discovered or should have discovered the violation. This subsection (e) does not bar a borrower from asserting a violation of this chapter as a defense in an action to collect the debt that was brought more than three (3) years from the date of occurrence of the violation as a matter of defense by recoupment or set-off in the action.
  6. In any action under this section, upon finding that the action is frivolous or brought for the purpose of harassment, the court may require the borrower instituting the action to indemnify the defendant for reasonable attorney's fees and costs. To assert a claim under this section, the lender or servicer shall file a motion with the court and provide at least fifteen (15) days after service in which the borrower may respond to deny, withdraw, or amend the complaint.
  7. In any action under this section, notice of the action by copy shall be filed simultaneously with the department of financial institutions.


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