Who is able to rescind a loan?
The right of rescission doesn’t apply just to borrowers. All consumers who have an ownership interest in the property have the right to rescind. While other parts of Regulation Z typically focus on the borrowers, this is one area where you need to look beyond the applicants, and identify any and all owners of the home being pledged on the transaction. Often times this will require looking at title work and making note of all fee owners of the property. What does the right of rescission require of lenders? The right of rescission requires lenders to provide certain “material disclosures” and multiple copies of the right of rescission notice to EACH owner of the property. Following proper disclosures, lenders must wait at least three business days (until you are reasonably satisfied that the owners have not rescinded) before disbursing loan proceeds. When does the three-day rescission time clock begin to tick? The three-day right of rescission period begins once the material disclosures
