Scenario for Joint Owner Buyout

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Question:

Would the scenario below fall under the joint owner buyout? A client comes in to get a loan to have the name of one of the owners removed from the Deed of Trust. However, there was a Quit Claim Deed done prior to the loan giving full ownership to the client. The client just needs the funds from the loan to buyout the other owner.

Answer:

If a quit claim deed had already been executed we would treat the loan as a refinancing. If the deed was being executed as a condition of our loan we would treat it as a purchase. However under both scenarios the right of rescission would apply.

First published on BankersOnline.com 8/8/11