A borrower's refinance loan documents contain an error in the Notice of Right to Cancel form showing the wrong rescission deadline date. The form shows the deadline as Thursday when it should be Friday. What is the effect?
Correct Answer
A) The rescission period extends to 3 years due to the material error
Under TILA Section 125(f), if the Notice of Right to Cancel contains a material error regarding the rescission period, it's considered a failure to properly deliver the notice. This triggers the extended 3-year rescission period. An incorrect deadline date is considered a material error that affects the borrower's understanding of their rights.
Why This Is the Correct Answer
Under TILA Section 125(f), if the Notice of Right to Cancel contains a material error regarding the rescission period, it's considered a failure to properly deliver the notice. This triggers the extended 3-year rescission period. An incorrect deadline date is considered a material error that affects the borrower's understanding of their rights.
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