Rescission Rights for Non-Obligated Owner?
by John Burnett, BOL Gurus Guru BIOS
Question: The loan is in the son's and daughter in law's name with the purpose to pay off credit card debt. His mother is pledging her home as collateral and is not on the loan. Should recission be done on the home for the mother?
Answer: Mom is a consumer under the definitions in 226.2 for the purposes of the Right of Rescission. She and she alone has the right to rescind the transaction under 226.23. Be certain she receives not only two copies of the notice of right to rescind, but the substantive disclosures on the loan (even though she is not obligated on the note).
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