Skip to content
 

Right Of Rescission Exception Criteria

Answered by: 
Andy Zavoina | CRCM

Question: 
Our company does not require a Rescission Period if the loan meets the following criteria: 1. Investment Property 2. Second Home 3. Primary Residence where we are paying off interim "construction" financing (we are not the original lender) and the borrower has never occupied the residence. I cannot find anything in Reg Z that would indicate this is a valid reason for waiving the Rescission Period. Are you aware of this exception? Secondly, there is a caveat to the above qualifications, i.e., if the borrower is receiving cashout and the loan meets the other criteria in #3 above, we DO require a Right of Rescission period.
Answer: 

That is several questions. Let's break these down to possible answers, but the circumstances of the requests would have to be examined more closely in some instances.

  1. Investment Property
    Business exemption, not Reg. Z

  2. Second Home
    Not the consumer's principal dwelling and not subject to ROR (226.23(a)(1))

  3. Primary Residence where we are paying off interim "construction" financing.

Residential mortgage transaction (226.2(a)(24)), not subject to RoR (226.23(f)(1))

First published on BankersOnline.com 05/19/03

First published on 05/19/2003

Filed under: 
Compliance
Filed under compliance as: 
Right of Rescission

Report a problem with this page

Search Topics