What If a Borrower Rescinds?
In certain transactions secured by a borrower’s primary residence, a borrower is entitled to the right of rescission. In short, they get three business days to sit back, relax and think about whether they really want to go through with the loan. To be honest, a consumer rescinding their loan is not a very common occurrence and in all our combined years of compliance experience we’ve only seen it happen a couple of times. That said, when a consumer does rescind, it’s a big deal. Essentially, it means the loan is null and void. While that may be easy enough to accomplish, you don’t want to overlook the fact that you must also make the borrower whole…like it never happened. This means you must refund any fees and charges paid by the borrower. And, to top it all off, there’s a clock ticking to get it all done.
Kevin explains more in the video.
Published
2024/06/06
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Kevin Edwards
Kevin brings years of experience and a unique perspective on regulatory matters to our clients. A self-proclaimed geek and accredited CRCM, Kevin is also a recovering attorney with experience as in-house counsel for a large regional bank and one of the leading national title insurance providers. For reasons unknown, Kevin decided to leave the safety and serenity of his desk job to seek fortune and glory as a wandering adventurer. Like a bank compliance version of Kwai Chang Caine, The Man with No Name or Don Quixote, he now travels the land seeking to help those in need and righting compliance wrongs, wherever he may find them. Kevin lives in Sioux Falls with his two children, who are surprisingly normal after having endured their father’s vivid imagination for their entire lives. He won’t admit to having any hobbies, because apparently “Regulations never sleep.” (While he does say this in his Batman voice, we’re pretty sure he’s joking.) From the looks of his Facebook page, he likes the outdoors and spending time with his large extended family (who seem like relatively normal people).