AgentIndustry News

Many refis offer right of rescission

Future-Proof: Navigate Threats, Seize Opportunities at ICNY 2018 | Jan 22-26 at the Marriott Marquis, Times Square, New York

Borrowers who refinance loans on their primary residences with lenders other than their current lender have a "right of rescission." They can cancel the deal at no cost to themselves within three days of closing. Following a rescission, the closed loan ceases to exist. What Is the Purpose? The right of rescission is designed to protect borrowers who have been deceptively sweet-talked into a transaction that is not in their financial interest. It gives them an opportunity to think it over, solicit advice from others, and back out, while recovering any monies they have paid out. Why the Exclusions? Probably the reason that investors -- those who rent out their properties -- were not given a right of rescission is that Congress decided they should be able to take care of themselves. Home purchasers are not covered because it is not possible to rescind a mortgage that finances a purchase without rescinding the purchase. Refinances with the borrower's current lender t...