Under TILA (Regulation Z), how long does a borrower have to exercise the right of rescission when refinancing a primary residence with a new lender?
Correct Answer
B) 3 business days after the later of: consummation of the transaction, delivery of the required rescission notice, or delivery of all material TILA disclosures
Under TILA Section 125 and Regulation Z §1026.23, the right of rescission for a refinance of a primary residence is 3 business days. The rescission period begins on the latest of three triggering events: (1) consummation of the transaction, (2) delivery of the required Notice of Right to Cancel, or (3) delivery of all material TILA disclosures. All three triggers must be considered to determine when the period actually begins.
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Related Topics & Key Terms
Key Terms:
Related Concepts
A fixed-rate mortgage has an interest rate that remains constant for the entire term of the loan, resulting in equal monthly principal and interest payments throughout the life of the mortgage.
Foreclosure is the legal process by which a lender takes possession of a property when a borrower fails to make mortgage payments. It allows the lender to sell the property to recover the outstanding debt.
The loan-to-value ratio (LTV) is the percentage of a property's appraised value or purchase price (whichever is lower) that is being financed through a mortgage. LTV = Loan Amount / Property Value.
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