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#2192822 - 09/17/18 07:50 PM Construction/Perm Loan and Rescission
mdog76 Offline
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Would a rescission be required at a one time construction to Perm loan closing? Technically they are not in their primary residence at time of loan closing.

Thank you

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#2192824 - 09/17/18 07:55 PM Re: Construction/Perm Loan and Rescission mdog76
Skittles Online
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If you are only taking the home being constructed (and I'm assuming ground-up), then rescission would not be required.
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#2192827 - 09/17/18 08:07 PM Re: Construction/Perm Loan and Rescission mdog76
mdog76 Offline
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Because they are not in their primary residence at time of loan closing, correct?

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#2192829 - 09/17/18 08:09 PM Re: Construction/Perm Loan and Rescission mdog76
Dan Persfull Offline
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Bloomington, IN
Because they are not in their primary residence at time of loan closing, correct?

No. It's because a construction only loan and the permanent financing replacing the construction loan meets the definition of a Residential Mortgage Transaction and RMTs are exempt from rescission.
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#2192831 - 09/17/18 08:12 PM Re: Construction/Perm Loan and Rescission mdog76
mdog76 Offline
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That makes sense, thanks for the help.

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#2192870 - 09/18/18 12:11 AM Re: Construction/Perm Loan and Rescission mdog76
David Dickinson Offline
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As Dan said, this is a RMT. Read the definition of RMT in the regulation and commentary in §1026.2*(a)(24) - specifically comment #4:
https://www.consumerfinance.gov/policy-compliance/rulemaking/regulations/1026/2/

Then read the RofR rules and how it doesn't apply to RMT - specifically §1026.23(f)(1):
https://www.consumerfinance.gov/policy-compliance/rulemaking/regulations/1026/23/

I regularly refer to these myself.
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#2193216 - 09/20/18 04:24 PM Re: Construction/Perm Loan and Rescission mdog76
mdog76 Offline
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Posts: 645
Thanks for the info everybody. Another question regarding this issue. What if customer has a construction loan that gets modified or even "refinanced" into permanent financing? The loan wasn't a one time construct/perm closing. And what if the new loan for permenant has a new loan number, new app, new docs, new everything? Still a Residential Mortgage Transaction by acquiring the primary residence?

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#2193227 - 09/20/18 05:53 PM Re: Construction/Perm Loan and Rescission mdog76
rlcarey Offline
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Not to be harsh, but it is all explained in the commentary to the links David posted.
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#2193229 - 09/20/18 06:00 PM Re: Construction/Perm Loan and Rescission mdog76
mdog76 Offline
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Ok, I'll go back and take another look.

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