Skip to content
BOL Conferences
Thread Options
#2244666 - 10/27/20 02:45 PM Right to Rescind
Cloud9 Offline
100 Club
Joined: Jul 2008
Posts: 208
This HELOC is to purchase a primary dwelling for the borrower, a single person. After he married, we modified the deed of trust to include his wife - we did not refinance the HELOC and add her as a borrower. Does the wife NOT have the right to rescind because the loan is exempt from recission?

Return to Top
Lending Compliance
#2244668 - 10/27/20 02:55 PM Re: Right to Rescind Cloud9
rlcarey Online
10K Club
rlcarey
Joined: Jul 2001
Posts: 83,229
Galveston, TX
First you are mixing apples and oranges.

Why the heck would you add a wife to a deed of trust because of marriage if you are not doing a new loan?

Second, unless you delivered a right of rescission at the time of closing, then every draw not used for the purchase would be subject to the right of rescission.
_________________________
The opinions expressed here should not be construed to be those of my employer: PPDocs.com

Return to Top
#2244670 - 10/27/20 03:06 PM Re: Right to Rescind Cloud9
Dan Persfull Offline
10K Club
Dan Persfull
Joined: Aug 2002
Posts: 47,517
Bloomington, IN
because the loan is exempt from recission?

The initial advance for the purchase transaction was exempt from rescission but all subsequent advances were/are subject to rescission so hopefully the proper rescission notice to cover those subsequent advances was provided or is being provided for each subsequent advance.

In my layman opinion the spouse added to the deed does not have rescission rights unless they may somehow apply to subsequent advances if rescission was not properly provided at the opening of the account. I don't know if the subsequent advances would qualify her as a "non-borrowing" spouse with rescission rights since the deed was modified.
_________________________
The opinions expressed are mine and they are not to be taken as legal advice.

Return to Top
#2244691 - 10/27/20 05:05 PM Re: Right to Rescind Cloud9
Cloud9 Offline
100 Club
Joined: Jul 2008
Posts: 208
First of all, I didn't do anything. Once again this is what a loan officer decided to do. I'm just trying to make sure the mess is fixed. I'm sure you can relate.

Return to Top
#2244696 - 10/27/20 05:19 PM Re: Right to Rescind Cloud9
rlcarey Online
10K Club
rlcarey
Joined: Jul 2001
Posts: 83,229
Galveston, TX
When I said "you" I did not mean "you" literally.

I would tell the loan officer to sit down with your legal counsel and figure it out. I have never heard of getting a deed of trust resigned because of a marriage after a loan has closed, even if outside of the bank they decided to add the spouse to the vesting in the property. Has the LO jeopardized your collateral position, title policy, etc., are the questions to be asked. And do they do this in every situation from a fair lending perspective.

As far as rescission, the regulation is going to be silent concerning later adding someone into title to the property. But again, you need to heed what Dan said above and talk to your legal counsel is case anything from a State law standpoint was triggered.
_________________________
The opinions expressed here should not be construed to be those of my employer: PPDocs.com

Return to Top

Moderator:  Andy_Z