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#731450 - 05/14/07 06:35 PM Recission Notices
COMPLIcated Offline
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Joined: Mar 2003
Posts: 1,035
OK
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
Dan Persfull Offline
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Dan Persfull
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Posts: 46,832
Bloomington, IN
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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#731588 - 05/14/07 08:03 PM Re: Recission Notices Dan Persfull
goingtoexperts Offline
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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
Rocky P Offline
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Florida
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
M Cockrell Offline
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M Cockrell
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Dallas, TX
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
COMPLIcated Offline
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OK
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
Dan Persfull Offline
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Bloomington, IN
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.
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#731992 - 05/15/07 02:10 PM Re: Recission Notices Dan Persfull
Sage Offline
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Posts: 914
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
goingtoexperts Offline
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Posts: 149
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
Key Lime Pie Offline
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Posts: 108
Louisville, KY
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
rlcarey Offline
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rlcarey
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Posts: 79,618
Galveston, TX
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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#764230 - 06/28/07 09:01 PM Re: Recission Notices rlcarey
MN Banker Offline
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Posts: 980
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
rlcarey Offline
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rlcarey
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Posts: 79,618
Galveston, TX
Not if it is not Person B's principal dwelling. A & C are the only ones that appear to live there.
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#765134 - 06/29/07 06:12 PM Re: Recission Notices rlcarey
Key Lime Pie Offline
100 Club
Joined: Jun 2002
Posts: 108
Louisville, KY
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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