According to 12 CFR 226.23, in a credit transaction in which a security interest is or will be retained or acquired in a consumer's principal dwelling, each consumer whose ownership interest is or will be subject to the security interest shall have the right to rescind the transaction, with some exceptions. To exercise the right to rescind, the consumer shall notify the creditor of the rescission by mail, telegram or other means of written communication. Notice is considered given when mailed, when filed for telegraphic transmission or, if sent by other means, when delivered to the creditor's designated place of business. The consumer may exercise the right to rescind until midnight of the third business day following consummation, delivery of the notice
required by paragraph (b) of this section, or delivery of all material disclosures, whichever occurs last.
The District of Columbia Notice of Right of Rescission or Right to Cancel is an important document that protects borrowers in the District of Columbia who have taken out a mortgage, lien, or security interest on their residence. This notice informs borrowers of their rights to cancel or rescind the transaction within a specified period. Under the Truth in Lending Act (TILL), borrowers in the District of Columbia are granted the right to cancel certain types of loan transactions that are secured by their primary residence. This right aims to provide consumers with the opportunity to reconsider their decision, seek alternative financing options or address any concerns they may have after signing the loan documents. When a borrower in the District of Columbia obtains a mortgage, lien, or security interest on their residence, the lender is required to provide a Notice of Right of Rescission. This notice outlines the specific procedures and timeframes within which the borrower can exercise their right to cancel the loan. The purpose of this notice is to ensure that borrowers are fully aware of their rights and have the opportunity to protect themselves from potential financial harm. There are different types of District of Columbia Notice of Right of Rescission or Right to Cancel depending on the type of loan transaction. The main categories include: 1. Residential mortgage loans: These are loans obtained by homeowners to finance the purchase or refinance of their primary residence. The Notice of Right of Rescission in this case grants the borrower three business days to cancel the loan from the date of closing. 2. Home equity loans or lines of credit: When borrowers take out a loan or line of credit using the equity in their home as collateral, they are entitled to receive a Notice of Right of Rescission. Following the closing of the loan, borrowers have up to three business days to exercise their right to cancel. 3. Reverse mortgages: For older homeowners aged 62 or older who are using a reverse mortgage to convert their home equity into cash, the Notice of Right of Rescission grants them a longer period of time. Borrowers have up to three business days after counseling to cancel the loan, or up to three years if they did not receive a proper notice or a complete set of documents. It is important for borrowers in the District of Columbia to carefully review the Notice of Right of Rescission provided by their lender, as it outlines the specific timeframe and procedures for exercising their right to cancel. Understanding these rights is crucial for borrowers to make informed decisions and protect themselves when entering into loan agreements secured by their residence.
