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ROR Notice Sent to Customer Not Entitled

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Question: 
If a Notice of Right to Rescind (ROR) is provided inadvertently to a customer not entitled to receive an ROR notice -- what are potential impacts? Could the loan be rescindable if they were provided the notice at loan closing?
Answer: 

One possible impact, if a lender delivers a rescission notice when it's not required in a purchase-loan transaction, would be the inability of the borrower to execute his obligation under the purchase agreement -- pay for the property. That could result in a default under the purchase contract, and the buyer could lose his or her earnest money deposit. Guess who gets chased for that money.

One would hope that someone at the closing would have her wits about her and pull that notice of rescission rights under such circumstances.

First published on 09/07/2015

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