Eligibility to Rescind

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Question:

On a home equity loan, if there is anyone over the age of 18 living in the home at the time the loan is approved, do they have to sign the deed of trust even though they are not on the original deed of trust?

Answer:

No. To be eligible to rescind a loan, the person living in the home must also be an owner. Section 226.2(a)(11) defines "consumer" as:

a cardholder or a natural person to whom consumer credit is offered or extended. However, for purposes of rescission under Section Section 226.15 and 226.23, the term also includes a natural person in whose principal dwelling a security interest is or will be retained or acquired, if that person’s ownership interest in the dwelling is or will be subject to the security interest.

First published on BankersOnline.com 6/3/02