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#1527388 - 03/25/11 09:43 PM Gen or Ref Rescission Notice
CometMan Offline
Joined: Mar 2011
Posts: 81
Having a discussion with fellow employee about the proper Rescission Notice needed. If you are refinancing a mortgage loan that your bank currently has a lien on, which notice would you use? This would be a new loan refinancing for rate and term considerations no new money advanced.

1. For Refinancing by a Different Lender or Origination of a New Rescindable Loan
2. For Refinancing with Original Lender

This is the terminology used on the Bankers Systems docs that we use. Thanks for your help.
Last edited by CometMan; 03/25/11 09:44 PM.
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Lending Compliance
#1527405 - 03/25/11 10:28 PM Re: Gen or Ref Rescission Notice CometMan
VRV Offline
100 Club
Joined: Jun 2007
Posts: 173
You may already realize this, but actually the situation you described probably doesn't even require a rescission notice to be given. Reg. Z 226.23 (f) states that the right to rescind does not apply to ..."(2) a refinancing or consolidation by the same creditor of an extension of credit already secured by the consumer's principal dwelling. The right of rescission shall apply, however, to the extent the new amount financed exceeds the unpaid principal balance, any earned unpaid finance charge on the existing debt, and amounts attributed solely to the costs of the refinancing or consolidation."

If you decided you wanted to give a right to cancel anyway even though it wasn't required, I would feel more comfortable giving the one for Refinancing by a Different Lender or Origination of a New Rescindable Loan because the other version contains language that states that the amount of credit previously provided is being increased. Since that statement is not true in this situation, it seems that this could be considered misleading.

The foregoing is my personal opinion and should not be construed as coming from my employer nor as legal advice.

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