When a borrower exercises their right of rescission, what happens to any money already advanced by the lender?
Correct Answer
B) The lender must return the money within 20 calendar days
Under TILA Section 125, when rescission occurs, the creditor must return any money or property given to anyone in connection with the transaction within 20 calendar days after receiving the rescission notice.
Why This Is the Correct Answer
Under TILA Section 125, when rescission occurs, the creditor must return any money or property given to anyone in connection with the transaction within 20 calendar days after receiving the rescission notice.
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
An MLO denies a mortgage application based partially on a credit report showing a bankruptcy from 8 years ago. The bankruptcy was actually discharged 11 years ago, but the credit report shows an incorrect date. For adverse action notice purposes, this error:
Next Question
Under TRID regulations, a creditor must provide a Loan Estimate to a consumer within how many business days of receiving an application?