Federal Mortgage LawsQuestion 77 of 400
Which of the following transactions carries a TILA right of rescission?
a.A loan to purchase a new primary home
b.A loan secured by an investment rental property
c.A loan to purchase a vacation second home
d.A refinance that increases the loan on the borrower's primary residence
Explanation
The TILA right of rescission applies to consumer credit transactions in which a security interest is taken in the consumer's principal dwelling, but it does NOT apply to residential mortgage transactions used to acquire or construct that dwelling (purchase-money loans). A refinance of the primary residence is subject to rescission; purchase loans and loans on non-principal dwellings are not.
Law Reference: Truth in Lending Act (Right of Rescission, Reg Z 1026.23)Practice all 400 questions free — no signup required.
Related questions on this topic
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