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Interest During Rescission
by Andy Zavoina, BOL Guru

Question: On a Freddie Mac refinance of a primary residence where there is the right of rescission; if the loan closes near the end of the month, and the rescission period goes into the next month, (closes 4/28/04 and the rescission date is 5/2/04) is it correct that the customer can only be charged interest from the rescission date (5/2/04) and not the closing or note date? Therefore, the customer would be charged interim interest from 5/2/04 to 6/1/04 and the first payment date would be 7/1/04 due to the fact that all Freddie Mac loans have payments due on the first of the month. Is this correct?

Answer: As to interest on rescission, this question has been asked before and is available in the InfoVault.

Refinancing: When does the interest accrual stop on the original loan?

Accruing Interest During the Rescission Period

First published on 9/20/04

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