Answer:
Yes.
Notwithstanding the general rule that consumers may have only one principal dwelling, when the consumer is acquiring or constructing a new principal dwelling, any loan subject to Regulation Z and secured by the equity in the consumer’s current principal dwelling (for example, a bridge loan) is subject to the right of rescission regardless of the purpose of that loan. For example, if a consumer whose principal dwelling is currently A builds B and secured by A is subject to the right or rescission. A loan secured by both A and B is, likewise, rescindable. [Commentary to Section 226.23(a)(1) #4]
First published on BankersOnline.com 5/23/11
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