Wanted to get some opinions about Living Trusts, Realty Trusts,and LLCs regarding rescission rights. Reg Z does talk about land trusts but not about the other types. It could be argued that a trust is not a consumer and therefore would not be applicable. We know to be safe you could give the right to rescind but we don't want to give rights that may not be applicable. What are your thoughts about this issue?

Janet; I just went through this exercise myself when I discovered that some home buyers were forming trusts or LLCs to take ownership. I think the answer lies in the fact that the loan is for consumer purposes. This is especially true when you have knowledge that the individuals applying are buying what is or will be their primary residence. My opinion is that if the loan is for consumer purposes, then I would extend the right of rescission to anyone who has an ownership interest even if through another entity.

This is strictly my opinion.

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Allan D. Virr, CRCM