If we use a HELOC to purchase a new home, I understand that the initial draw is not rescindable. Future draws on the LOC are rescindable. If the borrower takes a second draw from their line and then decides to rescind, do we have to cancel our intial DOT/Mortgage that we filed? Or can we keep it since it also secures the initial line of credit?

We don't do many of these but when we do we will not allow a draw above the initial advance for the purchase until after the ROR expires.

If you allowed a second advance before the ROR expired and they rescind that transaction IMO it does not affect the initial advance which is secured by your mortgage/DOT. What I would probably do in this case is record an amended mortgage for the amount of the initial advance and zero out the credit limit.

I agree with Dan's recommendation. You must file the amended mortgage within 20 days of receipt of the rescission. After the amended mortgage has been filed, you can then ask the customer for the second advance back.

How do you make sure you know about the second advance before it happens (for example if the borrower has checks with the LOC)? We were thinking of giving the RofR at the time of closing the initial loan (even though it is not required), otherwise we are afraid of missing giving it on a subsequent advance.

We give the ROR at the original closing and we do not give/order the borrower checks until after the ROR expires.

We follow the same procedure. It takes 10 days for the vendor to forward checks to the borrowers, anyway.

We also have a card access option. Once again, it takes about 10 days for the plastics to be cut and mailed. We process the plastics after the rescission has expired.