Situation:
Ex-husband and ex-wife own the dwelling.
Husband moved out of the house at the time of the divorce and is living in an apartment.
Husband is now taking out a mortgage to purchase wife's half of home; it will then be his residence.
Is this rescindable?

I think that as long as he still an ownership interest in the property, then it it rescindable. Now, when the loan closes, the wife will no longer have an owenership in the property, therefore, it is not rescindable for her.

An ownership in property does not make the dwelling the primary dwelling and in this case I think you could make a reasonable argument the dwelling is not his primary dwelling, however because you are dealing with a divorce situation I would look to the following and err on the side of caution and provide the ROR:

Supplement I, 226.2: Definitions and Rules of Construction (01/01/01)

2(a)(24) Residential mortgage transaction.

5. Acquisition. i. A residential mortgage transaction finances the acquisition of a consumer’s principal dwelling. The term does not include a transaction involving a consumer’s principal dwelling if the consumer had previously purchased and acquired some interest to the dwelling, even though the consumer had not acquired full legal title.

ii. Examples of new transactions involving a previously acquired dwelling include the financing of a balloon payment due under a land sale contract and an extension of credit made to a joint owner of property to buy out the other joint owner’s interest. In these instances, disclosures are not required under §226.18(q) or §226.19(a) (assumability policies and early disclosures for residential mortgage transactions). However, the rescission rules of §§226.15 and 226.23 do apply to these new transactions.

Thank you so much. That works for me.

Dan -- Where can I access a copy of Supplement I?

Click here.