Posted by L.G (Buc) Alboucq on 4/17/13 12:06pm
Msg #466052

RTC

Under what circumstances would there be no Right To Cancel included in a refinance?

Reply by Lee/AR on 4/17/13 12:09pm
Msg #466054

investment or 2nd home. Sometimes same lender.

Reply by Sylvia_FL on 4/17/13 12:13pm
Msg #466055

http://www.thetruthaboutmortgage.com/right-of-rescission/

Reply by L.G (Buc) Alboucq on 4/17/13 12:19pm
Msg #466056

Thank you
It kind of puzzled me when it was a refinance on an owner occupied property and there was not RTC. I verified that this was correct with the title company.

Reply by Jack/AL on 4/17/13 2:15pm
Msg #466069

Supposedly, there can be situations in which the borrower requests that there NOT be a RTC. For example, if borrowers are getting money from equity, and need it pronto, they can ask for funding on the day of signing. Of course, many borrowers would not know of this option, unless they asked the LO, or told the LO that they need to close quickly and get the funds quickly. If they are changing lenders, I do not know whether this is an option.

Reply by GOLDGIRL/CA on 4/17/13 3:10pm
Msg #466073

Thanks, Sylvia

Very interesting link. However, it has not been my uniform experience that:

"There is no right of rescission if the borrower is refinancing their loan with the same mortgage lender the loan was originally financed with." I've done alot of Own-Occ refis for two credit unions, and there's always been a RTC even if borrower's current loan is with the CU, cash out or not... so that's wierd. However, my experience has been that BofA routinely observes this.

Also, I didn't know: "For cash-out refinances financed with the same original lender, the cash-out amount is the only portion that carries a rescission period." Really? In other words, in actuality, there's no RTC for the refi itself, but only for the cashout amount? Had no idea!

And: "Home equity lines always have a right of rescission period, unless the entire line amount is used to fund a purchase transaction. For example, it is quite common for a HELOC to be used entirely as a purchase-money second mortgage, meaning no rescission." Had no idea!

Goes to show we gotta be careful when we make the blanket statement: "You have 3-days to cancel."

Actually, I'm starting to wonder if even lenders know all the ins and outs of RTCs ....

Also, re Jack's post: The general rule has been that the RTC can be waived only for borrowers living in certain federally designated disaster zones - like Katrina or Sandy areas. Not just cos they need the money pronto ...

Reply by Sylvia_FL on 4/17/13 3:28pm
Msg #466075

Re: Thanks, Sylvia

Even though there is no RTC requirements of some refi's the lender will still give an RTC.

Waiving the RTC requires a bona-fide emergency.

The government's website on the RTC leaves a lot to be desired. It has been changed since I last checked it which was a few years ago. But I found this when googling:

http://www.in.gov/dfi/2655.htm

Reply by GOLDGIRL/CA on 4/17/13 3:46pm
Msg #466081

That link's the most recent I've seen, too. n/m

Reply by JanetK_CA on 4/17/13 3:58pm
Msg #466088

It's often referred to as a "streamline" loan, which I believe also prohibits a cash-out beyond a minimal amount. (I don't know the figures off the top of my head and haven't looked at that link yet.)

Reply by NVLSlady/VA on 4/17/13 11:13pm
Msg #466161

Did one last night and made sure SS was "live" (on speaker) when it was confirmed that NO RTC needed for her CA property refi. It was really her prim res, owner occ, la de dah . . . she was working in VA - corporate type rental arrangement, while her real estate was in San Jose. I kept asking her before I called SS whether she owned any other real estate. Nope. That's it.

I had her cross out her initials on the clause (in escrow instructions) that she had rc'd copies of RTC; initial again and AGAIN next to her "N/A." I saw how eager she was to get the loan (and she talked a LOT during the signing); I needed her to understand there was no opportunity to rescind. Price to pay for the prime rate!

For the life of me, I can't remember now what criteria was used for 2nd home financing when I originated loans for a large C.U. But they were pretty strict - mainly to keep borrowers from getting the low rate on non-owner occupied "rentals."

Reply by ReneeK_MI on 4/18/13 5:33am
Msg #466170

link to Reg Z

http://www.fdic.gov/regulations/laws/rules/6500-1400.html

For the section on RTC, you would go down to Subpart C (Closed-End Credit), to

§ 226.23 Right of rescission.

I think it's always best to read straight from the source, at least for starters - before reading other's interpretations of it.