John & Mary divorce. John gets a loan to payoff the dwelling and pay Mary for her part of the house. Since this is a "purchase" loan does rescission apply? John has lived here and had ownership.

I suggest you search this in this forum. There's lots of discussion on the topic and two distinct sides to be aware of. You'll need to pick a side and be consistent.

I have tried several searches and only came up with one hit from Nov. 2011 to which no one gave an answer. I searched "divorce buyout", "divorce", and "rescission" for the past 3 years. If someone can point me in the direction of the other posts, I'd appreciate it.

Try searching using "divorce" and "purchase." I got about 45 hits (I searched only this forum and back 10 years).

I appreciate the help but would you please tell me exactly what goes in the search box? I've put "divorce" and "purchase"; I've put "divorce"; I've put +divorce and many other combinations. I've never had much luck with the search function but I'm guessing it's because I don't know how to use it properly.


I think I finally got something!!!! I put +divorce +purchase and got 191 hits.

In Texas we call this an Owelty Purchase...if that helps your search.

We call it a purchase for HMDA purposes but I'm thinking we also do RoR.

Look at comment 5 of the OSC to 1026.2(a)(24).
5. Acquisition. i. A residential mortgage transaction finances the acquisition of a consumer's principal dwelling. The term does not include a transaction involving a consumer's principal dwelling if the consumer had previously purchased and acquired some interest to the dwelling, even though the consumer had not acquired full legal title.

ii. Examples of new transactions involving a previously acquired dwelling include the financing of a balloon payment due under a land sale contract and an extension of credit made to a joint owner of property to buy out the other joint owner's interest. In these instances, disclosures are not required under §1026.18(q) (assumability policies). However, the rescission rules of §§1026.15 and 1026.23 do apply to these new transactions.iii. In other cases, the disclosure and rescission rules do not apply. For example, where a buyer enters into a written agreement with the creditor holding the seller's mortgage, allowing the buyer to assume the mortgage, if the buyer had previously purchased the property and agreed with the seller to make the mortgage payments, §1026.20(b) does not apply (assumptions involving residential mortgages).