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Is a mobile home loan rescindable?
by Mary Beth Guard, BOL Guru
Question: This is probably an elementary question, but I have tried to find the answer, with no luck. If we are taking a mobile home only, that is the borrower's principal dwelling, is this a rescindable transaction? We are NOT taking the dirt, just a title. Thanks.
Answer: The short answer is "yes", unless it is a purchase loan, and assuming, of course, that the loan is being made to a consumer, as opposed to a business. The right of rescission provisions are part of Regulation Z. The right of rescission is available if the lender is taking, or retaining, a mortgage or a security interest in a consumer's principal dwelling. The Commentary to Section 226.23 of Reg Z notes that the term "dwelling", as defined in 226.2, " includes structures that are classified as personalty under state law. For example, a transaction secured by a mobile home, trailer, or houseboat used as the consumer's principal dwelling may be rescindable."
The original version appeared in the April 2003 edition of the Oklahoma Bankers Association Compliance Informer.
First published on BankersOnline.com 8/25/03
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