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Does ROR Apply To All Borrowers?

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Question: 
Three borrowers have submitted a refinance request. Two of the borrowers use the original collateral as a second home and their income to qualify. The primary occupant of the collateral disclosed no income. Would the right of rescission apply to all borrowers since this is considered a second home for the two borrowers? They are also shown as owners on the deed.
Answer: 

The RoR is not dependent on whose income is used or is signing.

"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...

Be sure to look at the definition of a principal dwelling too. I assume the third borrower lives there? That puts it in this category.

There are differences between the Act and the Regulation as to applicability of RoR as well.

First published on BankersOnline.com 06/2/03

First published on 06/02/2003

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