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 North Carolina Notice of Right of Rescission, also known as the Right to Cancel, is a crucial legal document that provides borrowers with the opportunity to cancel or rescind certain mortgage, lien, or security interest agreements on their residence within a specified period of time. This notice grants borrowers the ability to reconsider their decision and potentially make changes to their financial commitments without facing any penalties or obligations. In North Carolina, there are various types of notices of right of rescission or right to cancel pertaining to different situations involving mortgages, liens, or security interests on borrowers' residences. Some common types include: 1. Mortgage Refinance: When a homeowner in North Carolina seeks to refinance their existing mortgage, they are granted a three-day right of rescission period. This allows them to review the terms and conditions of their new mortgage agreement and, if desired, cancel the transaction within three business days after signing the documents. 2. Home Equity Loans or Lines of Credit: If a borrower takes out a home equity loan or opens a home equity line of credit (HELOT), they are entitled to a three-day right of rescission. This gives them the opportunity to reconsider the loan terms and cancel the agreement if they find it unsuitable within the specified period. 3. Second Mortgages or Liens: In the case of obtaining a second mortgage or a lien on a property, North Carolina borrowers have the right to cancel these agreements within three business days from the date of signing the documents. This provision protects homeowners from potentially burdensome financial commitments. It is important for borrowers to carefully read and understand the North Carolina Notice of Right of Rescission or Right to Cancel, ensuring they are aware of their rights and the applicable timelines. The notice typically includes information regarding the cancellation process, the deadline for exercising the right to cancel, and instructions for notifying the lender or creditor of the decision to rescind the agreement. By providing borrowers with the option to cancel or rescind certain mortgage, lien, or security interest agreements, the North Carolina Notice of Right of Rescission offers a valuable consumer protection measure. It allows homeowners the opportunity to carefully consider their financial decisions and make any necessary changes to ensure they are in the best interest of their overall financial well-being.
