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#731450 - 05/14/07 06:35 PM
Recission Notices
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Diamond Poster
Joined: Mar 2003
Posts: 1,035
OK
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We have a loan where we are doing a refinance of a primary residence in which the husband and wife both reside there. The loan is in the husband's name only - he is the only borrower. On the recission notices we have 2 copies in the file but they both just have his name at the top because it refers to "Borrower" in which he is the only one. However, at the acknowledgement at the bottom it has both the husband and wife's name and they both signed. Is this okay or does she have to have a separate notice in her name only?
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#731489 - 05/14/07 06:55 PM
Re: Recission Notices
COMPLIcated
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10K Club
Joined: Aug 2002
Posts: 47,673
Bloomington, IN
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EACH consumer who has the right to rescind must receive 2 copies of the right to cancel notice and a copy of the material disclosures.
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The opinions expressed are mine and they are not to be taken as legal advice.
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#731588 - 05/14/07 08:03 PM
Re: Recission Notices
Dan Persfull
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100 Club
Joined: Jul 2006
Posts: 149
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Regarding rescision, what about a scenario in which the husband and wife are both obligors on the loan, both live in the residence, yet only the husband is on the deed /owns the property? Who has the right to rescind? Only the husband as owner? Or both husband and wife since the property is the primary residence for both? TY!
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#731622 - 05/14/07 08:19 PM
Re: Recission Notices
goingtoexperts
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Power Poster
Joined: Jun 2003
Posts: 7,728
Florida
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§ 226.23 Right of rescission.
(a) Consumer's right to rescind. (1) In a credit transaction in which a security interest is or will be retained or acquired in a consumer' s principal dwelling, each consumer whose ownership interest is or will be subject to the security interest shall have the right to rescind the transaction, except for transactions described in paragraph (f) of this section.
According to the regulation, the husband is owner and he can rescind. The wife does not have an ownership interest and cannot.
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#731625 - 05/14/07 08:22 PM
Re: Recission Notices
Rocky P
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Diamond Poster
Joined: Jan 2003
Posts: 1,058
Dallas, TX
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What about states (i.e. Texas) that have community property rights?
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#731695 - 05/14/07 09:04 PM
Re: Recission Notices
Dan Persfull
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Diamond Poster
Joined: Mar 2003
Posts: 1,035
OK
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So if there are 2 copies in the loan file and one is signed by her and one is signed by him (and they each got their own as well to keep) then we are okay? I am just not used to our mortgage dept's software that will only print the name of the actual "borrower" at the top of the notice.
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#731897 - 05/15/07 01:13 PM
Re: Recission Notices
COMPLIcated
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10K Club
Joined: Aug 2002
Posts: 47,673
Bloomington, IN
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M. Cockrell....different states could have a more restrictive rules where both parties would be entitled to rescind...you just have to research the appropriate state law....however from the provisions of Reg. Z only the consumer who has an ownership interest and the residence is their primary residence has the reight to rescind.
COMPLIcated...the model rescission form does not require the consumer's name...however if it's your practice to put the consumer's name on it then I would suggest that each consumer's name who has the right to rescind be put on the form.
_________________________
The opinions expressed are mine and they are not to be taken as legal advice.
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#731992 - 05/15/07 02:10 PM
Re: Recission Notices
Dan Persfull
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Platinum Poster
Joined: Aug 2005
Posts: 914
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As far as marital interests and the ROR: See the last sentence of this exerpt of the Reg Z commentary.
2(a)(11) Consumer.
1. Scope. Guarantors, endorsers, and sureties are not generally consumers for purposes of the regulation, but they may be entitled to rescind under certain circumstances and they may have certain rights if they are obligated on credit card plans.
2. Rescission rules. For purposes of rescission under §§226.15 and 226.23, a consumer includes any natural person whose ownership interest in his or her principal dwelling is subject to the risk of loss. Thus, if a security interest is taken in A's ownership interest in a house and that house is A's principal dwelling, A is a consumer for purposes of rescission, even if A is not liable,either primarily or secondarily, on the underlying consumer credit transaction. An ownership interest does not include, for example,leaseholds or inchoate rights, such as dower.
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#732259 - 05/15/07 04:09 PM
Re: Recission Notices
Sage
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100 Club
Joined: Jul 2006
Posts: 149
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Thanks Sage. I understand if a husband and wife both own the property, both live in the residence, but only the husband is on the loan, both the husband and wife still have the right to rescind. The scenario with in which the wife does not own the property, but lives in the residence being held for collateral seems less clear. Obviously state laws may have more restrictive conditions and would need to be considered. But for all general purposes, it appears under Reg. Z the ownership interest and primary residence conditions must both be met. Thanks to everyone!
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#764054 - 06/28/07 07:54 PM
Re: Recission Notices
goingtoexperts
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100 Club
Joined: Jun 2002
Posts: 108
Louisville, KY
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Bringing this topic back up.
Person A and Person B hold title to the property. Person A lives in the property with Wife C. Person A applies for and is approved for a refi on the property (A is only obligor on note). A & B were given rescission notices. B has decided to rescind (B doesn't not want to hold title any longer on this property). Once A & B work out title issue, A will refi.
I don't think B had a right to rescind, however we gave them that right with the notice. Right? What do we do now? Can the loan be rescinded?
What about Wife C???
Thanks for any input.
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#764167 - 06/28/07 08:35 PM
Re: Recission Notices
Key Lime Pie
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10K Club
Joined: Jul 2001
Posts: 84,334
Galveston, TX
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You gave them the right and from a contractual standpoint, they could most likely claim since you gave them the right (in writing) they have that option. Why would you want to put the bank in the middle of a dispute like this anyway? Whether the wife has any interest in the property and required the RofR would be a matter of State law.
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The opinions expressed here should not be construed to be those of my employer: PPDocs.com
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#764230 - 06/28/07 09:01 PM
Re: Recission Notices
rlcarey
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Platinum Poster
Joined: Aug 2006
Posts: 980
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If I read your post correctly, Person B had ownership interest in the property, therefore you were right in giving them the R of R
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#764253 - 06/28/07 09:11 PM
Re: Recission Notices
MN Banker
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10K Club
Joined: Jul 2001
Posts: 84,334
Galveston, TX
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Not if it is not Person B's principal dwelling. A & C are the only ones that appear to live there.
_________________________
The opinions expressed here should not be construed to be those of my employer: PPDocs.com
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#765134 - 06/29/07 06:12 PM
Re: Recission Notices
rlcarey
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100 Club
Joined: Jun 2002
Posts: 108
Louisville, KY
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You're right, B does not live in this dwelling. We did allow B to rescind and all parties are happy now. Thanks for the comments!
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