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 Wisconsin Notice of Right of Rescission or Right to Cancel is an essential legal document designed to protect borrowers who have taken out a mortgage, lien, or security interest on their residence. This notice grants borrowers the right to cancel or rescind the agreement within a specified time frame without penalty or obligation. It ensures that borrowers have sufficient time to review the terms of their loan and seek legal advice if necessary before committing to the agreement. In Wisconsin, there are primarily two types of notices related to the right of rescission or right to cancel regarding mortgage, lien, or security interest on borrowers' residence: 1. Initial Notice of Right of Rescission or Right to Cancel: This notice is typically provided to borrowers at the time of loan application or during the closing process. It details the borrower's right to cancel the loan agreement within three business days after signing the documents. The notice should clearly state the procedure and deadline for exercising this right, including the lender's contact information and the borrower's responsibilities, if any, for returning loan funds. 2. Notice of Extended Right of Rescission or Right to Cancel: In certain situations, borrowers may be entitled to an extended right of rescission or cancellation beyond the initial three-day period. This often occurs when the lender fails to provide the borrower with certain required disclosures or when significant changes are made to the loan terms after the initial transaction. The notice of the extended right of rescission or cancellation must be provided to the borrower promptly after the triggering event. It should outline the revised time frame for cancellation and any additional instructions or conditions applicable to the extended right. It is crucial for borrowers in Wisconsin to thoroughly understand their rights and obligations outlined in the Notice of Right of Rescission or Right to Cancel. Failure to exercise this right within the specified time frame may result in the forfeiture of the right to cancel or rescind the loan agreement. Hence, it is advisable for borrowers to carefully review these notices, consult with legal professionals if needed, and exercise their right to cancel or rescind if they find it necessary to do so. By being aware of these rights, borrowers can ensure their financial wellbeing and make informed decisions regarding their mortgage, lien, or security interest on their residence in Wisconsin.
