Federal Mortgage LawsQuestion 43 of 400
Under Regulation Z, for a closed-end mortgage a borrower may exercise the right of rescission for up to three years if:
a.The lender failed to deliver the required rescission notice or material disclosures
b.The borrower simply changes their mind after three days
c.The property value declines
d.Interest rates fall after closing
Explanation
If the lender fails to provide the required notice of the right to rescind or material TILA disclosures, the rescission period is extended to up to three years from consummation instead of three business days. A mere change of mind after three days, a decline in value, or a rate drop does not extend rescission. The extended period penalizes disclosure failures.
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