If the bank failed to provide borrowers with Notices of Right to Rescind, is it also an automatic violation of Early Disbursement?

violation of Early Disbursement?

What is that?

Well I guess I assumed you'd know I meant Delay of Creditor's Performance in Reg Z.

You didn't give them a right of rescission - that is your violation.

They now have 3 years to rescind.

At any time during the next 3 years, this borrower could drop a notice of rescission on you. Your deed of trust will die instantly and you will have 20 days to refund all fees and interest collected since you handed this borrower an application form.

In the instance that Richard is quoting above.....the customer gives their rescission notice say in year 2....wouldn't that also have to be accompanied by a complete payoff of the loan, minus any fees and interest? Just wondering......never had to deal with that scenario.

Section 1026.23(d) spells it out step by step--there's no guesswork.

Thanks Richard.....should have looked there first....just have never had a loan actually rescinded here.

In 11 years as a regulator and 16 years running a compliance program, I don't remember one, either. Delayed rescission in a case like we're discussing isn't likely unless the loan goes sour and the borrower hires an attorney.

And if the loan does go south and you initiate foreclosure - that three year timeframe goes out the window. You could be 10 years into the loan - 1026.23(h).

Thank you all kindly!