Answer by Dan Persfull: Other than for the right of rescission the mother would not be a consumer for the purposes of Reg. Z therefore 226.35 would not apply.
Answer by David Dickinson: Dan's right, but let me add: the mother must receive all disclosures (prepared for the borrowers) and a rescission notice. Otherwise, she may not fully understand what she has the right to rescind. I suggest the bank prepare a letter that may be signed by the mother that attests to the fact that the mother received a copy of the note, Truth in Lending disclosure, Right of Rescission notice, HUD-1 settlement statement and HOEPA disclosure if applicable.
First published on BankersOnline.com 6/13/11