ROR on Two Loans Rolled Together

Question:

I have a customer who wants to roll his 1st lien purchase money and his 2nd lien home improvement note together. Will this loan be subject to right of rescission? Both loans are at the same institution. </strong>

Answer:

Rescission will not apply to this loan as there is no new money (beyond the payoff of these 2 loans). There is no new money to the customer or to the bank, so RofR does NOT apply.

First published on BankersOnline.com 5/17/04