Posted by Kirsten on 4/10/05 8:00pm
Msg #30846
No RTC for rental property
I just witnessed a HELOC closing for a rental property. It was explained to me that the package would not contain a RTC. In these types of transactions, does the borrower NOT have any cancellation rights? I thought cancellation right was a federal requirement. Thanks in advance for your response.
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Reply by Jay on 4/10/05 8:05pm
Msg #30847
No RTC for commercial property.
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Reply by Stephen_VA on 4/10/05 8:09pm
Msg #30848
RTC is a protection for your primary home.
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Reply by HisHughness on 4/10/05 10:16pm
Msg #30859
The RTC is grounded in consumer protection law. If you're buying income-producing property, you aren't a consumer -- you're a capitalist.
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Reply by Ted_MI on 4/11/05 2:19pm
Msg #30935
Re: Hugh is correct in his assessment n/m
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Reply by Ted_MI on 4/10/05 8:23pm
Msg #30851
Re: Kirsten, you are correct.......
though that the right to rescission is mandated by federal law. As others have mentioned, it just doesn't apply to rental property.
However, that being said that doesn't mean necessarily that there won't be one. I just did an ameriquest refinancing several nights ago. Was there a three day right to rescission? Yep. Was the refinancing of the principal residence? Nope, it was of a vacation home in northern Michigan. Not only that, but there was also a one week right to cancel provided by ameriquest.
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Reply by Kirsten on 4/10/05 8:28pm
Msg #30852
So...
the borrower's DON'T have any cancellation option? In my case today, the borrowers were a bit concerned about the terms of the loan, they were hesitant to sign and I wasn't able to advise them that they could exercise their right to cancel if they chose to.
Are they just "stuck?" No way to cancel? Thanks everyone.
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Reply by Ted_MI on 4/10/05 8:35pm
Msg #30853
Re: That is correct......
unless you had the situation that I did. That is why a signing in which there is no right to cancel can take a really long time, as the borrowers may wish to read everything. I can't say that I blame them for such an inclination; I would probably do the same thing under the circumstances.
Hopefully their loan officer was available to answer any questions that they might have had. That might have allayed some of their concerns.
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Reply by Terry_MN on 4/10/05 9:30pm
Msg #30856
Re: Kirsten, you are correct.......
Ted, It sounds like the the refinancing you were involved with was for a secondary residence. I have always had RTCs included in primary and secondary residence packages - not for investment properties.
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Reply by Ted_MI on 4/11/05 2:24pm
Msg #30937
Re: Kirsten, you are correct.......
Terry,
Yes, you are right. The refinancing was for a secondary residence, a vacation home. And they did not rent it out either. In contrast to your experience, I have handled some HELOC's on secondary residences, where there was no rtc. So I don't believe it is legally necessary.
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Reply by Kirsten on 4/10/05 8:40pm
Msg #30854
Thanks All
for your answers. You're a huge help! Regards.
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