We are financing a loan to purchase a new primary dwelling for a customer. However, we are adding additonal money to pay off a mortage loan at another bank on their current primary dwelling that will be demolished for their new primary home to take its place.

I'll take a stab....but just a guess. If the old home will be demolished including the foundation, down to the dirt, it's a construction loan. By paying off (refinancing) the loan from the other bank, the bank is basically just acquiring the lot for the new construction.

Strike me down, O gurus..........

Oh....and so based upon my opinion above, no ROR.

Well, upon rethinking....if the borrower is still living in the home at closing, I would say, yes.....ROR.

Anyone else?

ROR does exist for the amount of money that will be paying off the other mortgage.

I do not believe that demolishing the old home relieves the Bank of their liability

ROR applies...in my opinion

See? I was trying to make it too difficult.

If you take a security interest in what is the consumer's existing primary dwelling at the time the loan is made then rescission will apply regardless what the intent for that dwelling is after closing. This of course is assuming the loan is subject to Reg. Z.

Do we have an obligation, when the refi is to use monies out to purchase a new dwelling, to indicate on the RoR what dollar portion is rescindable?

Do we have an obligation, when the refi is to use monies out to purchase a new dwelling, to indicate on the RoR what dollar portion is rescindable?

No. See the H-9 model form.