Question

Handy had a 30-year variable mortgage on her home. In 2000 she then refinances that mortgage Anchor Mortgage Corporation. She got a 15-year fixed rate $80,500 loan, or which $75,000 was used to pay off the old mortgage. At the closing Handy was given two different forms telling her she had the right to rescind the loan within three days. One was intended for use during refinancing when a new creditor was involved, the other for use during refinancing with the same creditor. Two years later, Handy sought to rescind the loan because the notice violated the TILA. Can the loan be rescinded? Explain.

Answer 1

As per the terms of refinancing the loan agreement could have rescinded by Handy during the period of three days. Thus, in case the loan had to be rescinded the same had to be done within that period of three days. Now two years have elapsed from the date of refinancing agreement and thus, Handy does not have the right to rescind the agreement. Also there must be some proper grounds for rescinding the loan agreement. Notice violating the TILA is not an acceptable ground for rescinding any contract. Thus, the loan cannot be rescinded at this point of time.