WASHINGTON Mon Apr 28, 2014 11:22am EDT

(Reuters) - The U.S. Supreme Court on Monday agreed to decide what process struggling homeowners need to follow if they want to back out of mortgages issued when lenders fail to adhere to a federal disclosure law.

The court will weigh whether homeowners need to write a letter to their lender or file a lawsuit in order to benefit from a provision of the federal law, known as the Truth in Lending Act. The law allows consumers to rescind mortgages for up to three years after the agreement was made if the lender does not notify them of various details about the loan, including finance charges and rate of interest.

The provision is typically used by homeowners who are struggling to pay their mortgages. Lawyers for consumers say mortgage companies routinely violated the law in the years prior to the 2008 financial crisis.

Appeals courts are split over what homeowners have to do.

The court agreed to hear an appeal filed by Larry and Cheryle Jesinoski over the $611,000 loan they obtained from Countrywide Home Loans Inc. in 2007. Countrywide is now part of Bank of America Corp(BAC.N).

Oral arguments and a decision are expected in the court next term, which begins in October and ends in June.

The case is Jesinoski v. Countrywide, U.S. Supreme Court, No. 13-684.