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In strict legal terms, the term ‘rescission’ is a legal remedy that one can make use of provided certain conditions are fulfilled and we have the renowned four bars of rescission. However we will look at this specifically in light of this right being granted to borrowers in a scenario that involves a mortgage loan being sought. A borrower’s right to rescission is fundamentally a legal right that is at the borrower’s disposal in this context ergo the legal right owes its origins to the TILA Act. Some mortgage agreements can be mothballed without any monetary repercussions; moreover this right can only be brought into play within the first three days. The utility of this right extends only to mortgage refinances, HELOCS (home equity lines of credit), home equity loans etc. and this exempts new purchase loans. Moving on, there are certain situations where this right cannot be made use of such as where the contract states specifically that a state agency is acting as the lender. There are two other scenarios as well. Lastly, the borrower does not owe an explanation as to why he has pursued this course of action (rescinding).
Related Topics: What Counts as Business Day What is Home Equity Line of Credit (HELOC)? What are the required disclosures? What is HELOC? Explain Characteristics of a HELOC What is a rescission period and when does it end? Explain Funding regarding rescission period. What is the Definition of “business day” in a mortgage rescission
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