For a rescindable mortgage, assume a bona fide personal financial emergency requires the credit before the rescission period expires. Which documentation is required for the consumers to waive or modify that right?
Correct Answer
A) A dated written statement describing the emergency and specifically waiving or modifying the right, signed by every consumer entitled to rescind
A. Obtain the dated, specific written statement signed by every entitled consumer. An oral request does not meet the written-statement requirement. The regulation prohibits printed waiver forms for this purpose. Scope and exceptions: Possessing a signed waiver does not itself establish a genuine emergency or automatically protect the creditor from liability. A desire for faster funding alone is not the substantive test. Source: Section 1026.23(e); comments 23(e)-1 and -2 — https://www.consumerfinance.gov/rules-policy/regulations/1026/23/
Why This Is the Correct Answer
A. Obtain the dated, specific written statement signed by every entitled consumer. An oral request does not meet the written-statement requirement. The regulation prohibits printed waiver forms for this purpose. Scope and exceptions: Possessing a signed waiver does not itself establish a genuine emergency or automatically protect the creditor from liability. A desire for faster funding alone is not the substantive test.
Why the Other Options Are Wrong
Option B: A verbal waiver on a recorded line, confirmed by the closing agent in writing
A recording and closing-agent confirmation do not replace the consumers' statement.
Option C: A statement from the borrower plus the written consent of the loan investor
Investor consent does not replace signatures of all entitled consumers.
Option D: A pre-printed waiver form, signed and dated on the 3rd business day
A preprinted waiver form is prohibited.
Exam Tip
Verify the qualifying emergency as well as the waiver documentation.
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