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#777952 - 07/18/07 07:46 PM Help!! Recission
SouthernComfort Offline
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Southern Illinois, USA
Purchase money first. Second mortgage to fund down payment for first loan. Recission apply? I think yes. Loan officer is saying no because the funds are being used for the down payment on the purchase money first. Can someone help quick?

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#777968 - 07/18/07 07:56 PM Re: Help!! Recission SouthernComfort
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The second is still a purchase. No RoR required.
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#777980 - 07/18/07 08:00 PM Re: Help!! Recission SouthernComfort
Dan Persfull Offline
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If the second mortgage to fund the downpayment is secured by the borrower's current primary residence the ROR most definitely applies. See the Commentary to 226.23(a)(1)(4).
Last edited by Dan Persfull; 07/18/07 08:05 PM.
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#777992 - 07/18/07 08:06 PM Re: Help!! Recission Dan Persfull
#12 Offline
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But wouldn't the 2nd still be a Residential Mortgage Transaction, which is exempt from RoR? I'm assuming that this is their primary residence which is being purchased.
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#777998 - 07/18/07 08:08 PM Re: Help!! Recission #12
#12 Offline
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Ok, now that you've edited your post I would agree with you, but if as in my post above they are purchasing their primary residence, and only the new home is securing it, then it is a RMT, right?
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#778002 - 07/18/07 08:10 PM Re: Help!! Recission #12
Dan Persfull Offline
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No. Read the citation I quoted.

It's not clear to me by this post what secures the second mortgage. All it says is purchase money first and a second mortgage to make the down payment. As I said what secures the second mortgage?

If both mortgage are secured only by the residence being purchased then both are RMTs and exempt from rescission. However if the second is secured by the current primary residence then rescission will apply, regardless if secured by both the current primary residence and the residence being purchased.
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#778011 - 07/18/07 08:14 PM Re: Help!! Recission Dan Persfull
#12 Offline
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That's exactly what I said. I'm not arguing with you, I totally agree. I just am not saying it clearly. I assumed both loans were being secured by just the home being purchased when I answered. I know...I know...I shouldn't assume.

I agree that if their current home is securing the 2nd mtg then there should be RoR.
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#778025 - 07/18/07 08:19 PM Re: Help!! Recission #12
Dan Persfull Offline
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Dan Persfull
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Bloomington, IN
No problem...my connection to BOL today is very very very slow...I posted my response before I saw your second post.

Because of how the original post was worded you assumed one scenario and I assumed another and you know what assume does... .. that's why it's important to give all pertinent facts in asking a question.
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The opinions expressed are mine and they are not to be taken as legal advice.

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#778037 - 07/18/07 08:21 PM Re: Help!! Recission Dan Persfull
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#778159 - 07/18/07 09:29 PM Re: Help!! Recission Dan Persfull
SouthernComfort Offline
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Southern Illinois, USA
Sorry I didn't explain. Yes, both loans are secured by the home being purchased.

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