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#1860346 - 10/10/13 04:27 PM
ROR
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Gold Star
Joined: Jan 2012
Posts: 303
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I have a question regarding a loan that was subject to a Right of Rescission and the notice was not given to the borrowers at the closing table. The loan closed 8 months ago. Does this mean that the loan is now under a 3 year right of rescission? Or if we give them the ROR notice and have it signed now, than is it subject to the standard 3 days and we cross our fingers they don't rescind?
Thanks.
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#1860363 - 10/10/13 04:40 PM
Re: ROR
Everest
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Gold Star
Joined: Jan 2012
Posts: 303
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Thanks TR for the quick response. That was my thought but it was getting questioned.
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#1861201 - 10/11/13 10:07 PM
Re: ROR
Everest
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Power Poster
Joined: Jun 2003
Posts: 7,656
Florida
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The exact wording is
"If the required notice or material disclosures are not delivered, the right to rescind shall expire 3 years after consummation, upon transfer of all of the consumer's interest in the property, or upon sale of the property, whichever occurs first."
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#1871626 - 11/15/13 04:57 PM
Re: ROR
Everest
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Member
Joined: Aug 2011
Posts: 51
Arkansas
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I have a situation simular to skigirl. We have been giving the ROR noticed and the customer has signed, but the LO was having the customer sign on the day the rescission period ended. Funds were not disbursed within the three days. Recently, we just had a compliance audit by our internal auditors and was told to put the loan bach into rescission. I have never heard of putting a loan back into rescission, Is that possible???? If so, how would you go about doing so?
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#1871634 - 11/15/13 05:01 PM
Re: ROR
Everest
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10K Club
Joined: Jul 2001
Posts: 83,363
Galveston, TX
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our internal auditors and was told to put the loan bach into rescission.
You are going to have to ask them, because I don't know what they are talking about. And what do you mean the customer signed the form - you mean they signed saying they received the form after the three days had already expired or is there a place on these forms for them to sign to say they are not rescinding????
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The opinions expressed here should not be construed to be those of my employer: PPDocs.com
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#1871687 - 11/15/13 06:03 PM
Re: ROR
Everest
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Diamond Poster
Joined: Dec 2008
Posts: 1,268
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This is an interesting thread--I have been wondering if a bank is required to tell the customer of the three year extended ROR? Or, as said above, do you just cross your fingers?
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#1871691 - 11/15/13 06:04 PM
Re: ROR
Everest
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10K Club
Joined: Sep 2002
Posts: 13,965
TN
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Keep your fingers and toes crossed.
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#1871721 - 11/15/13 06:53 PM
Re: ROR
Combustible
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Power Poster
Joined: Jun 2003
Posts: 7,656
Florida
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The ONLY time I would mention it to anyone is to special assets in the event the customer goes delinquent with the possibility of foreclosure within the 3 years. A cryptic note similar to: "If the bank elects to initiate foreclosure on this loan before XX/XX/XX, refer to the compliance officer or read 1026.23(a)(3)(i)" might be put in file or noted in the customer records,
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Integrity. With it, nothing else matters. Without it, nothing else matters.
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#1871744 - 11/15/13 07:18 PM
Re: ROR
Everest
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10K Club
Joined: Jul 2001
Posts: 83,363
Galveston, TX
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A cryptic note similar to: "If the bank elects to initiate foreclosure on this loan before XX/XX/XX, refer to the compliance officer or read 1026.23(a)(3)(i)" might be put in file or noted in the customer records,
Cryptic or otherwise, that note would be discoverable and I would not advise it.
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The opinions expressed here should not be construed to be those of my employer: PPDocs.com
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#1871840 - 11/15/13 09:21 PM
Re: ROR
Everest
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Member
Joined: Aug 2011
Posts: 51
Arkansas
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The form was signed and dated by the customer on the day the loan was funded. Which was three days after closing but the loan officer failed to get the disclosure signed at closing. So yes, they signed saying they received the form after the three days had already expired. I don't know how you would put a loan back into rescission, really confused on this one.
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#1871852 - 11/15/13 09:30 PM
Re: ROR
Everest
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10K Club
Joined: Jul 2001
Posts: 83,363
Galveston, TX
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Well, when I am confronted with such a recommendation I always go back to the source and have them explain what they mean. Ask your audit department.
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The opinions expressed here should not be construed to be those of my employer: PPDocs.com
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#1871950 - 11/17/13 01:23 PM
Re: ROR
Everest
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10K Club
Joined: Jul 2001
Posts: 83,363
Galveston, TX
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The borrower must sign acknowledging receipt of the RoR.
One slight correct. There is no regulatory requirement that the borrower sign for the receipt of the right of rescission form (see model forms). They are required to sign the form in order to rescind the transaction.
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The opinions expressed here should not be construed to be those of my employer: PPDocs.com
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#1872042 - 11/18/13 03:40 PM
Re: ROR
rlcarey
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10K Club
Joined: Jul 2003
Posts: 17,398
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I fact checked my answer above against this where John Burnett says The borrower must sign to acknowledge receipt of the rescission notice and disclosures but then he tags on Richard's answer here at a later date saying Although this is common practice, Regulation Z does not require anyone to sign acknowledging receipt of the notice required by Section 1026.23(b)(1).
So, I retract my statement that the signatures are required. However, if you have a form that has a line for signatures on it, I can tell you that secondary market will demand it be signed. I've also come across examiners that want signatures where there are lines provided for them. But, it appears that, as long as you can prove the borrowers were given the proper number of copies at the closing table, you may have an argument against a violation in the case the borrowers signed acknowledging receipt three days later.
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#1872048 - 11/18/13 03:53 PM
Re: ROR
Everest
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10K Club
Joined: Nov 2002
Posts: 20,656
The Swamp
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You might not have a violation, but I wouldn't want to defend the fact in court that I gave them 2 copies and material disclosures without a signature.
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My opinion only. Not legal advice. Say you'll haunt me - Stone Sour
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#1872411 - 11/19/13 03:42 PM
Re: ROR
Everest
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Member
Joined: Aug 2011
Posts: 51
Arkansas
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Thanks.... I think we will just sit tight for three years on this one.
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