Right of rescission,
Definition of Right of rescission:
The right of rescission applies only to the refinancing of a mortgage. It does not apply to the purchase of a new home. If a borrower wants to cancel a loan, he must do so at the latest at midnight of the third day following the completion of the refinancing, including having received a mandatory Truth in Lending disclosure from the lender and two copies of a notice advising him of his right to rescind.
The right of rescission is a right, set forth by the Truth in Lending Act (TILA) under U.S. federal law, of a borrower to cancel a home equity loan or line of credit with a new lender, or to cancel a refinance transaction done with another lender other than the current mortgagee, within three days of closing. The right is provided on a no-questions-asked basis, and the lender must give up its claim to the property and refund all fees within 20 days of exercising the right of rescission.
Right afforded in certain jurisdiction whereby a borrower can cancel a mortgage loan (typically within 3 days of signing) upon changing his or her mind regarding purchase of the property. Its objective is to counter the high-pressure sales tactics employed by some real estate dealers.
How to use Right of rescission in a sentence?
- Established by the Truth in Lending Act (TILA) under U.S. federal law, the right of rescission allows a borrower to cancel a home equity loan, line of credit, or refinance with a new lender, other than with the current mortgagee, within three days of closing.
- The right of rescission is intended to protect the public against inaccurate and unfair credit billing and credit card practices.
- Lenders must give borrowers a notice advising them of their right to rescind.
- The right of rescission is provided on a no-questions-asked basis.
Meaning of Right of rescission & Right of rescission Definition