A borrower refinances their home on Monday and receives proper TILA disclosures. On Wednesday, they decide to rescind but realize they need the loan proceeds to pay off credit cards due Thursday. What happens if they rescind?
Correct Answer
A) They can rescind and have 20 days to return loan proceeds after the lender returns their payments
Under TILA Section 125(b), when a borrower rescinds, they have 20 days after the creditor takes the required rescission actions (returning money and releasing the security interest) to tender back any loan proceeds. The borrower's financial situation doesn't affect their rescission rights.
Why This Is the Correct Answer
Under TILA Section 125(b), when a borrower rescinds, they have 20 days after the creditor takes the required rescission actions (returning money and releasing the security interest) to tender back any loan proceeds. The borrower's financial situation doesn't affect their rescission rights.
More Federal Laws Questions
A mortgage broker's website states 'Qualified borrowers can get loans with down payments as low as 3%.' Which statement about TILA advertising requirements is correct?
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A borrower refinances their primary residence on Tuesday and receives the required TILA disclosures. Assuming no federal holidays, what is the last day they can exercise their right of rescission?
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