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.
Virginia Notice of Right of Rescission or Right to Cancel regarding Mortgage, Lien or Security Interest on Borrowers' Residence is a legal document that grants borrowers the right to cancel a mortgage, lien, or security interest in their residential property within a specified time frame. This notice is designed to protect the rights of borrowers in Virginia when entering into a financial agreement, allowing them ample time to reconsider their decision and potentially rescind the transaction without facing penalties or additional fees. Under Virginia law, there are different types of Notice of Right of Rescission or Right to Cancel depending on the nature of the transaction: 1. Mortgage: When a borrower obtains a mortgage loan to purchase a residential property, the Virginia Notice of Right of Rescission allows the borrower to cancel the mortgage agreement within three business days from the date of closing. This provision ensures that borrowers have sufficient time to review the terms of the loan and seek legal advice if needed before finalizing the transaction. 2. Lien: In cases where a borrower is subject to a lien on their residential property, such as a mechanic's lien for unpaid construction work or a tax lien for delinquent property taxes, the Virginia Notice of Right of Rescission grants the borrower the right to cancel the lien within three business days of receiving notice of its existence. This provision ensures that borrowers have an opportunity to dispute or address any incorrect or unjust liens placed against their property. 3. Security Interest: If a borrower grants a lender a security interest, such as a home equity line of credit (HELOT) or a loan secured by the borrower's home, the Virginia Notice of Right of Rescission provides a three-business-day window in which the borrower can cancel the security interest agreement. This allows borrowers to reassess their financial obligations and potentially withdraw from the agreement if they determine it is not in their best interest. It is essential for borrowers to carefully read and understand the terms outlined in the Virginia Notice of Right of Rescission or Right to Cancel. This notice should clearly state the timeframe in which the borrower must exercise their right to rescind the agreement, along with any specific procedures or forms required for cancellation. By exercising this right, borrowers can protect themselves from potentially unfavorable or exploitative financial arrangements related to their residential property in Virginia.
