If a mother and father own a property and the mother and son take out a loan against the property, please confirm the following:

1. Mother and father sign mortgage

2. Mother and son sign note

3. All 3 sign Right of Rescission

4. All 3 sign Truth in Lending

Am I correct or am I dreaming?
Thanks.

Thanks Truffle.

The Mortgage has to mirror the Deed and the son isn't an owner so he would NOT sign the Mortgage.

The son does live with the parents so he will sign rescission.

These loans can be so confusing!

Agree with previous response, except I would contend that, if the son is not an owner of the property, he wouldn't need to sign the mortgage. Unless there is some specific law in your state that I'm not aware of, only the persons in title to the property, and spouses who need to sign to release dower or homestead rights, need to sign the mortgage, although I don't think it would hurt anything if he did sign it.

With respect to Truth in Lending, first I would clarify that Reg. Z doesn't actually require anyone to "sign" the TILA disclosure, but with respect to who is entitled to receive a copy of the TILA disclosure, the borrowers should receive it in addition to each person with the Right to Rescind. So if the father lives in the property, he would be entitled to the Right to Rescind and a copy of the TILA disclosure.

Mortgages don't HAVE to mirror the deed. A husband can borrow by himself on jointly owned property. The wife only has to sign off.

We would have anyone signing the note sign the mortgage unless there was a specific state requirement against it. Often, that's a secondary market requirement.

The son doesn't sign the right to rescind because he doesn't have an ownership interest in the property. Doesn't matter if he lives there any more than you'd have a renter get an ROR if the owners were refinancing the property.

The son definitely has the Right of Rescission, he's promising to payback the loan and lives in the property. Renters wouldn't sign ROR as they never promised to pay anything on the note.

I agree the husband can borrow by himself but the wife signing the mortgage is the point. She is an owner and that's why she is signing off. Mortgages DEFINITELY mirror the deed, hence the reason she is required to sign the mortgage if she's on the deed.

The son would not have RoR because he is not an owner. In order to have the Right to Rescind, you must both own and live in the property.

How can someone who does not have any ownership in the property sign an agreement (mortgage) to pledge that property as collateral for a loan. They have no legal capacity to do so, their signature on such a security agreement is meaningless IMO.



This is not accurate. The son, or the renter, does not meet the definition of a consumer for the purposes of rescission. As #12 said the consumer must have an ownership interest in the residence and the residence must be the consumer's primary residence.

I was going to ask a simular question regarding REG Z & TILA ROR requirements ... here it goes:

Mother & son own a home.
Mother & daughter live there.
Son & daughter applied for credit securing the loan with the home.

Per Reg. Z requirements: The loan would be exempt from rescission. It is not the consumer's (son's) principal dwelling, the mother has an ownership interest but is not the consumer and the daughter is not an owner. Correct????

Per TILA requirements: We are required to grant the “right to rescind” to the mother and daughter. Even though the mother is not on the loan, she has an ownership interest in her principal dwelling, therefore rescission applies. Even though the daughter is not on the deed, the home is her principal dwelling and credit is being extended to her, therefore rescission applies. Even though the son has an ownership interest and is on the loan, he does not reside at the home, therefore, the bank is not required to grant him a "right to rescind". Correct????

Final Answer: Only the mother & daughter should sign rescission notice to comply with TILA. Correct????

Not sure I can sort through all of the above, but based on the following

Mother & son own a home.
Mother & daughter live there.
Son & daughter applied for credit securing the loan with the home.

the only person that gets the right to resicind is the mother.

Go to 226.2 and look up the definition of a consumer for the purposes of rescission.

Not that Dan needs backup, but I agree with him.

Ok... but, why not the daughter? Even though she is not on the deed, I thought that TILA requirements are that:
In the case of any consumer credit transaction in which the collateral on the loan is used as a principal dwelling of the person obligated on the loan, the obligator shall have the 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

Daughter does not have a ownership interest.

An exert from the definition of a consumer in 226.2, as SB says, the daugher has no ownership.

.....However, for purposes of rescission......the term also includes .......in whose principal dwelling ...... if that person's ownership interest .......will be subject to the security interest.