11/07/2005
If a Bank provides the borrower with a right of rescission, but wasn’t required to by law (i.e. on a purchase money transaction) and material disclosures were not provided (i.e. the final Truth in Lending disclosure provided at closing was not accurate and the APR was understated), is the borrower entitled to rescind the transaction up to three years after closing?
10/17/2005
When closing a new loan using the existing residence as collateral to purchase additional acreage, the right of rescission applies. When do you have the sellers sign their documents, since we will only have one loan, but it has the new property as collateral as well? The same day as borrowers' initial signing, or when the loan comes out of rescission? The concern I have is that if the customers sign a mortgage on a property they do not own, what happens if the seller decides not to sell when we are in the rescission period? Other instititutions have waited until it is out of rescission, and then have the seller sign a separate HUD along with the borrowers, showing the date it came out of rescission. Our compliance officer states the seller must sign the same day as the initial docs are signed.
09/19/2005
The loan is in the son's and daughter in law's name with the purpose to pay off credit card debt. His mother is pledging her home as collateral and is not on the loan. Should recission be done on the home for the mother?
08/01/2005
We have a construction loan for 18 months made to an individual to build a Tri-Plex. One unit will be his personal residence and the other two he will rent. The borrower already owned the property. In Reg Z 226.3 (4) it talks about owner occupied rental property and whether it is determined to be business purpose. The borrowers income is $9,000 from financial planning and an estimated $3,000 from rentals. We also have a takeout commitment from our mortgage division approving his permanent loan. Would this be considered a business purpose loan or a consumer loan?
04/04/2005
Is a right of rescission required for a loan on a mobile home which is not attached to real estate, is less than $25,000 and is the borrower's primary residence? The lender and borrower are in Texas.
02/21/2005
I have a compliance question regarding right of rescission. If a person's primary residence is a piece of land with a mobile home on that piece of land and the person applies for a loan using the land only as collateral, is a rescission period still required? I would think it would be since the property is that person's primary residence, even though the mobile home is not being used as collateral.
01/17/2005
We have a first lien for the construction of a new home and a second on their existing home. Is the loan, by virtue of the second lien used to purchase dirt and build the new home, rescindable?
11/29/2004
We have a contract payoff that we are currently processing as a refinance. There is no contract or deed recorded. Is this technically a purchase transaction? If not, does Rescission apply?
11/08/2004
RESPA & Vacant Lot Mortgages
Answer by Mary Beth Guard, BOL Guru
Guru BIOS
11/01/2004
We are an FDIC regulated bank and are considering starting to offer HELOCs. What are the required disclosures and are there good "cheat sheets" you could recommend? I am fairly new to compliance and would appreciate some help in understanding this product.