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Primary Loan Refi + Construction Perm-ROR Apply?

Does this scenario require a three day right of rescission? Borrower currently has a mortgage elsewhere on their primary dwelling. They want to refinance that loan while simultaneously securing a construction-perm loan with us for an addition to the home. Is it subject due to the cash out, refi component or exempt due to the construction component?

by Randy Carey It is a refinance by a different creditor and subject to the RofR. You don't have to go any further than that.


by Dan Persfull: Even if another creditor was not being paid off this loan does not qualify for an exemption from the ROR due to the "construction component".

This is a home improvement loan, it is not a residential mortgage transaction (construction loan).

(24) Residential mortgage transaction means a transaction in which a mortgage, deed of trust, purchase money security interest arising under an installment sales contract, or equivalent consensual security interest is created or retained in the consumer's principal dwelling to finance the acquisition or initial construction of that dwelling.

First published on 07/23/2017

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