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Unformatted text preview: loon payment, demand feature, lender's assumption policy, and the security interest retained in the property. Variable Rate – For closed–end adjustable rate mortgages (ARMs) there are new special requirements. These are explained in detail in Chapter 8. RIGHT TO CANCEL
A borrower has the right to rescind before midnight of the third business day following consummation of contract, when the security for a loan is real property which is the principal residence of the borrower. Exempt Transactions – The right to cancel does not apply to: • • Any mortgage/trust deed used to finance acquisition or construction of a dwelling, or the assumption of such a mortgage, and Refinancing by the original creditor, “if the original creditor only finances nonfinance charges such as attorney's fees, title examination fees, and insurance premiums” (1986 Federal Reserve Board Ruling). Failure to Give Notice – If notice of the right to rescind is not given, the borrower has three years to rescind, or until the property is transferred, whichever is less. The Notice of Right to Cancel explains the borrower's rights and complies with this requirement. Form 11-1: Notice of Right to Cancel (CAR NRC–11) 11-4 Licensing School for Appraisal, CPA, Contractors, Insurance, Real Estate, Notary, Nurse, Food Handlers, Tax and Securities 11: FINANCING DISCLOSURE REQUIREMENTS Dynasty School (www.dynastySchool.com) 11-5 REAL ESTATE FINANCE EFFECT OF RESCISSION When a customer exercises his right to rescind, he is not liable for any finance or other charge, and any security interest becomes void upon such a rescission. Within 10 days after receipt of a notice of rescission, the creditor shall return to the Customer any money or property given as earnest money, down payment, or otherwise, and shall take any action necessary or appropriate to reflect the termination of any security' interest created under the transaction. If the creditor has delivered any property to the customer, the customer may retain possession of it. Upon the performance of the creditor's obligations under this section, the customer shall tender the property to the creditor, except that if return of the property in kind would be impracticable or inequitable...
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This note was uploaded on 12/30/2010 for the course SOC 101 taught by Professor Zhung during the Spring '10 term at Punjab Engineering College.
- Spring '10