What is a Quiet Title action?

Regarding the context of property financed through a mortgage loan that has been rescinded the legal action to remove the lien is known as Quieting Title. This is an operation of law. A Quiet Title action is a Court procedure that is required in order to get a Court Order confirming that the procedures undertaken by the homeowner in performing rescission was done in accordance with Truth In Landing Act. Thus, when the 20 day requirement for the mortgage lender fails to tender first the the title should be free and clear of any liens or encumbrances by operation of law.
Quiet Title is a method of taking adverse possession, (basically changing the title (deed) of the property from one person to another person without buying it but taking control though legal action.
It is a means of involuntary transfer by operation of law.
An action to quiet title is a lawsuit filed to establish ownership of real property (land and buildings affixed to land). The plaintiff in a quiet title action seeks a court order that prevents the respondent from making any subsequent claim to the property. Quiet title actions are necessary because real estate may change hands often, and it is not always easy to determine who has title to the property.

The homeowner shall have the right to rescind
According to Title 15 § 1635 (a) the obligor (homeowner) shall have the right to rescind the transaction and [see § 1635 (b)] when an obligor exercises his right to rescind under subsection (a) of this section, he is not liable for any finance or other charge, and any security interest given by the obligor, including any such interest arising by operation of law, becomes void upon such a rescission. Within 20 days after receipt of a notice of rescission, the creditor shall return to the obligor any money or property given as earnest money, down payment, or otherwise, and shall take any action necessary or appropriate to reflect the termination of any security interest created under the transaction. If the creditor has delivered any property to the obligor, the obligor may retain possession of it. Upon the performance of the creditor’s obligations under this section, the obligor shall tender the property to the creditor, except that if return of the property in kind would be impracticable or inequitable, the obligor shall tender its reasonable value. Tender shall be made at the location of the property or at the residence of the obligor, at the option of the obligor. If the creditor does not take possession of the property within 20 days after tender by the obligor, ownership of the property vests in the obligor without obligation on his part to pay for it. The procedures prescribed by this subsection shall apply except when otherwise ordered by a court.
Tender shall be made at the location of the property or at the residence of the obligor (homeowner), at the option of the obligor.
In our opinion when it comes to rescission if the lender does not respond to the rescission letter within the 20 day requirement to tender, ownership of the property vests in the homeowner without obligation on his part to pay for it and title can be transferred to the homeowner by operation of law in a quiet title action.
In real estate terms, title is the right of ownership and possession of a particular property, so to quiet title means to take legal action to settle a title dispute. A title dispute can arise when there are conflicting claims of ownership over a piece of property. Therefore, in a quiet title action, a court proceeding removes a "cloud" or possible encumbrance on the title to real property to firmly establish in law ownership of the property. Thus, this action would "quiet" any challenges or claims to the title.

 
 
Definition from Nolo’s Plain-English Law Dictionary
A lawsuit to determine who owns a piece of real estate and so "quiet" any disputes over the title. Such a suit arises when there is some question about title -- for example, uncertainty about the boundary, claims by a lienholder, a question about an old mortgage, or an easement that's been used for years without a recorded description. A quiet title lawsuit names as defendants anyone who might have an interest (including descendants -- known or unknown -- of prior owners). Notice of the action must be posted on the property and published in an approved local newspaper. If the court rules that the plaintiff is the rightful owner, it will grant a quiet title judgment, which can be recorded and will settle the issue of ownership. Quiet title actions are a common example of "friendly" lawsuits in which often there is no opposition. (See also: cloud on title)
Definition provided by Nolo’s Plain-English Law Dictionary.
 
 

Establish Ownership Quiet Title
A proceeding to establish an individual's right to ownership of real property against one or more adverse claimants.
An action to quiet title is a lawsuit filed to establish ownership of real property (land and buildings affixed to land). The plaintiff in a quiet title action seeks a court order that prevents the respondent from making any subsequent claim to the property. Quiet title actions are necessary because real estate may change hands often, and it is not always easy to determine who has title to the property.
A quiet title suit is also called a suit to remove a cloud. A cloud is any claim or potential claim to ownership of the property. The cloud can be a claim of full ownership of the property or a claim of partial ownership, such as a lien in an amount that does not exceed the value of the property. A title to real property is clouded if the plaintiff, as the buyer or recipient of real estate, might have to defend her full ownership of the property in court against some party in the future. A landowner may bring a quiet title action regardless of whether the respondent is asserting a present right to gain possession of the premises.
For example, assume that the seller of the property agreed to sell but died before the sale was finalized. Assume further that the seller also gave the property to a nephew in a will. In such a situation, both the nephew and the buyer have valid grounds for filing a suit to quiet title because each has a valid claim to the property.
The law on quiet title actions varies from state to state. Some states have quiet title statutes. Other states allow courts to fashion most of the laws regarding quiet title actions. 
Under the COMMON LAW;, a plaintiff must be in possession of the property to bring a quiet title action, but many state statutes do not require actual possession by the plaintiff. In other states possession is not relevant. In some states only the person who holds legal title to the real estate may file a quiet title action, but in other states anyone with sufficient interest in the property may bring a quiet title action. Generally, a person who has sold the property does not have sufficient interest. When a landowner owns property subject to a mortgage, the landowner may bring a quiet title action in states where the mortgagor retains title to the property. If the mortgagee keeps the title until the mortgage is paid, the mortgagee, not the landowner, would have to bring the action.
The general rule in a quiet title action is that the plaintiff may succeed only on the strength of his own claim to the real estate, and not on the weakness of the respondent's claim. The plaintiff bears the burden of proving that he owns the title to the property. A plaintiff may have less than a fee simple, or less than full ownership, and maintain an action to quiet title. So long as the plaintiff's interest is valid and the respondent's interest is not, the plaintiff will succeed in removing the cloud (the respondent's claim) from the title to the property.

American Mortgage Network, Incorporated, Plaintiff-appellee, v. Michael D. Shelton; Pamela Shelton, Defendants-appellants
United States Court of Appeals, Fourth Circuit. - 486 F.3d 815
Footnote 5; 
This Court does not believe that the Sheltons' offer to sell their residence to Amnet for an amount determined by a non-independent appraiser constituted "reasonable value." Amnet was not in the business of selling real estate
It could be said that Fannie Mae and Freddie Mac is not in the selling of real estate property as per the rescission and turning over the property to them, however Chase is. 
There is language in 15 USC 1635(b) that says "Upon the performance of the creditor's obligations under this section the obligor shall tender the property to the creditor, except that if return of the property in kind would be impracticable or inequitable, the obligor shall tender its reasonable value. (the home or the money (refinance))
Then it says, "if the creditor does not take possession of the property within 20 days after tender by the obligor, ownership of the property vest in the obligor without obligation on his part to pay for it"....take the house or it's mine...quiet title action....
 
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