Ok, here's a tricky one. Our secondary market is doing a loan for John Doe to purchase a house. We are doing a bank loan for the down payment, which is a second. Our loan is subject to right of recission, correct? Our secondary market mortgage originator thinks since it is technically "purchase money", then it shouldn't apply. We are thinking it does. Help!

Your secondary market person is correct. As long as the second is closed simulaneously with the first, rescission does not apply.

Thank you, can you tell me where in the regs it states this?

You won't find this stated this way. You need to read the definition of loans that require rescission.

First Comm...it's a loan, right? Not a HELOC?

Yes, it is a loan.

Lien status is specifically addressed in the Commentary to 226.2(a)(24).

I found it, thanks everyone!