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#2125302 - 04/06/17 03:55 PM Right of Rescission Question
peony Offline
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peony
Joined: Mar 2013
Posts: 250
We have two loans closing the same day - One is a mortgage loan which is paying off an construction loan and the other is a HELOC which the first advance will be the downpayment for the mortgage loan. Both will be secured by the same primary residence. Would the first advance of the HELOC considered as a purchase since the mortgage is the permanent financing of the construction loan? If so, that means Right of Rescission do not apply to the HELOC but Right of Rescission do apply to the mortgage loan.

Am I thinking this correctly?

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Lending Compliance
#2125330 - 04/06/17 06:01 PM Re: Right of Rescission Question peony
peony Offline
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peony
Joined: Mar 2013
Posts: 250
Bump.

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#2125354 - 04/06/17 07:19 PM Re: Right of Rescission Question peony
Dan Persfull Offline
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Dan Persfull
Joined: Aug 2002
Posts: 47,533
Bloomington, IN
The loan paying off the construction loan is not subject to rescission, it meets the definition of a Residential Mortgage Transaction.

The initial advance from the HELOC being used for the purchase is not subject to rescission. However all subsequent advances would be.
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The opinions expressed are mine and they are not to be taken as legal advice.

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