Regarding a 1st mortgage HELOC transaction for $60,000, it has come to my attention that the transaction is a full line and full draw. Therefore, no Right of Rescission is required. On the other hand, I've been told that there is requirement for a Right of Rescission, since Loan Fees are involved, which makes it rescindable. If anyone could provide some guidance on the subject matter, I would greatly appreciate it. I am going through Regulation Z to see whether I can come up with addresses this particular issue.

Regards,

Are you asking about a HELOC used as a purchase transaction (even a piggy back to a closed end?)

In that case, the exemption is because the first draw is for a purchase, not because it is a "full draw". It needn't be a full draw.

The first draw, the one for the purchase, is exempt. Subsequent draws are subject to rescission and most vendors offer a specially tailored ROR for use in these situations.

Here is the commentary that speaks to this situation:

1026.15(f) Exempt Transactions

1. Residential mortgage transaction. Although residential mortgage transactions would seldom be made on bona fide open-end credit plans (under which repeated transactions must be reasonably contemplated), an advance on an open-end plan could be for a downpayment for the purchase of a dwelling that would then secure the remainder of the line. In such a case, only the particular advance for the downpayment would be exempt from the rescission right.