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#378345 - 06/28/05 07:13 PM ROR - Emergency Definition
Betsy Offline
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Betsy
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Minnesota
A question was raised as to what consitutes an emergency for ROR? Would the loss of a deal because of rescission be a valid reason for this exemption? I have read 226.23 in the reg and commentary and I am still not sure. I have always felt that this was never acceptable. Has anyone had experience with this and what is the regulators response?

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Lending Compliance
#378346 - 06/28/05 07:22 PM Re: ROR - Emergency Definition
Dan Persfull Offline
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Dan Persfull
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Bloomington, IN
Quote:

Would the loss of a deal because of rescission be a valid reason for this exemption?




Poor planning on your part does not constitute an emergency on my part.


That would not be a legitimate financial emergency in my opinion.
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#378347 - 06/28/05 07:25 PM Re: ROR - Emergency Definition
Betsy Offline
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Betsy
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Minnesota
I would agree with you Dan, but I just want to find out what the industry is doing. This is the first time in 4 years that a lender has suggested using this type of exemption. Thanks for the reply.

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#378348 - 06/28/05 08:15 PM Re: ROR - Emergency Definition
Andy_Z Offline
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I don't know that there is a solid explanation but have always looked at the emergency as being one where the house is in danger of being further harmed. As is a storm came through and removed the roof and another storm is on the way. The 3 days is a window for more damage.

I have not heard of any favorable opinion that if this isn't done now, I'll suffer an interest loss, greater expense, etc. That is where Dan's poor planning comment rings true with me.

If you go outside the box and agree with the lender, are you ready to extend the rescission period 3 years?
Last edited by Andy Z; 06/28/05 08:17 PM.
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#378349 - 06/29/05 02:37 PM Re: ROR - Emergency Definition
Anonymous
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At a recent seminar I attended on RESPA, I was told that it can only be used in a life or death situation. The speaker stated it does not apply if you need to "get someone out of jail" and she stated keeping the deal was not a reason. She was a former FDIC examiner and now a speaker for PBS. This was just her advice. Thought I would share.

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#378350 - 06/29/05 02:48 PM Re: ROR - Emergency Definition
Andy_Z Offline
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I think the bottom line is that it is not something to be taken lightly, easily waived or just worked around to be convenient to the customer.
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AndyZ CRCM
My opinions are not necessarily my employers.
R+R-R=R+R
Rules and Regs minus Relationships equals Resentment and Rebellion. John Maxwell

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#378351 - 06/29/05 02:56 PM Re: ROR - Emergency Definition
Betsy Offline
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Betsy
Joined: Aug 2001
Posts: 105
Minnesota
Thanks to everyone for the comments. It is nice to have others share their experiences when addressing this type of a situation.

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#378352 - 06/29/05 05:41 PM Re: ROR - Emergency Definition
David Dickinson Offline
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David Dickinson
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Central City, NE
If it helps Betsy, I agree with all that is said. Below I have cut and pasted a portion from our Advance Lending Manual pertaining to this topic:

Waiver: [Section 226.23(e) page 6666.04]
To modify or waive the right to rescind, the consumer must have a bona fide personal financial emergency that must be met before the end of the rescission period. For example:

Furnace replacement in the winter
Funeral expenses
Storm disaster recovery

The following do not constitute an emergency:

Inconvenience for the borrowers to return to the bank
Delinquent taxes
Stock market timing

The bank is required to determine whether the waiver is actually justified.

To document the modification or waiver, the consumer must give a dated, written statement specifically modifying or waiving the right and also include a brief description of the emergency. Remember also that each consumer who is entitled to rescind must sign the waiver statement. Preprinted forms may not be used to waive the right to rescind.
-----------------------------------------------------------

I hope this helps.
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David Dickinson
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#378353 - 06/29/05 07:57 PM Re: ROR - Emergency Definition
HRH Okie Banker Offline
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Joined: Jan 2003
Posts: 3,070
Oklahoma
I've had two situations in the last few years that were so different. The first - the officer wanted to call an emergency for a private banking customer to refinance their home loan at another bank that had a very high interest rate and the other was for medical expenses to get one of the borrowers (critically ill) to a specialist at a hospital in another state. We denied the request for the first and approved the request for the second.
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#378354 - 06/29/05 08:02 PM Re: ROR - Emergency Definition
David Dickinson Offline
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David Dickinson
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Central City, NE
I would agree with your logic DKarbs.
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