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#972847 - 06/11/08 04:21 AM Rescission
Anonymous
Unregistered

Can the 3 day rescission period on a refinance of an owner occupied property be waived, if so under what circumstances?

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#972872 - 06/11/08 12:54 PM Re: Rescission Anonymous
Dan Persfull Offline
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Dan Persfull
Joined: Aug 2002
Posts: 46,423
Bloomington, IN
Yes it can. It has to be a personal financial emergency, such as replacing a furnace in -20 degree weather, a medical emergency for an immediate family member, to avoid foreclosure.
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The opinions expressed are mine and they are not to be taken as legal advice.

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#973034 - 06/11/08 03:06 PM Re: Rescission Dan Persfull
Anonymous
Unregistered

Yes. But be careful you don't trade one issue for another. Review Reg Z 226.23 or 226.15 for applicable waiver rules.

A bona fide financial emergency is one that will cause significant financial distress to the obligor. Just wanting to get their money three days sooner so they can go on vacation won't cut it.

Don't put words in the borrowers' mouths and don't prepare the waiver request for them.

Suggest you do a little more research on the subject before you close the loan. BOL Info Vault is an excellent place to start. As for "under what circumstances" well, that's where the can of worms starts.

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#973035 - 06/11/08 03:06 PM Re: Rescission Dan Persfull
Rocky P Offline
Power Poster
Joined: Jun 2003
Posts: 7,243
Florida
This topic has been covered many times, and Dan is (as always) 100% right.

A personal financial emergency does not mean losing a deposit, missing out on a super sale, a substitute for advance planning, etc. The penalty is potentially 3 years to rescend the loan. Just because the bank says OK, it is not the final decision. Examiners can cite the bank if they feel the case is weak, so can the court.
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