A lender fails to provide the proper notice of right to rescind at closing. How long does the borrower have to exercise their right of rescission?
Correct Answer
D) 3 years from closing
Under TILA Section 125, if the required disclosures are not properly delivered, the right to rescind may be exercised until 3 years after consummation or upon sale of the property, whichever occurs first.
Why This Is the Correct Answer
Under TILA Section 125, if the required disclosures are not properly delivered, the right to rescind may be exercised until 3 years after consummation or upon sale of the property, whichever occurs first.
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?
A loan's APR increases from 4.25% on the Loan Estimate to 4.35% on the Closing Disclosure due to a rate lock expiration. What action is required?
A lender originates a mortgage that meets all QM requirements. Three years later, the borrower defaults and claims the lender violated the ATR rule. What legal protection does the lender have?
For a closed-end mortgage loan, when must the creditor provide the Closing Disclosure to the borrower?
Which of the following documents must be provided to trigger the start of the 3-day rescission period?
People Also Study
General Mortgage Knowledge
23% of exam
Mortgage Loan Origination Activities
25% of exam
Ethics, Fraud & Consumer Protection
17% of exam
Uniform State Test Content
12% of exam
Previous Question
A lender is considering a mortgage application where the borrower's debt-to-income ratio is 45%, but all other QM requirements are met. The loan amount is within conforming limits. If the lender can demonstrate the borrower has substantial compensating factors, what type of loan could this be?
Next Question
A creditor discovers that a loan initially classified as non-HPML actually qualifies as an HPML due to a calculation error discovered 45 days after consummation. What action is required?