Class Blog ( 1 of 1)
Allowable Rescission
A borrower would like to refinance two (2) loans, her primary residence in town and her lake house. Though the payments have been made on time for both properties, a decrease in the borrower’s income, along with a higher standard for underwriting approval, has made the borrower ineligible for the requested mortgage on the lakefront property. In order to refinance the second home the mortgage loan originator advised the borrower that a cosigner would be needed. The borrower discussed the situation with her parents, and they agreed to cosign for the mortgage loan, and the closing went as planned.
After the closing, the parents had second thoughts about
their obligations. They realized that if anything happened to their daughter’s
finances, they would be obligated to make those payments, which would be very
difficult for them financially.
The parents told their daughter that they were rescinding
the refinance and wanted her to pursue other avenues of financing.
Is this a process that the parents are allowed to pursue?
1 of 1
ReplyDeleteno....no rescission period on a second home
Because the closing already took place, and the lake house is not a primary residence, the parents (co-signers) cannot pursue rescinding.
ReplyDelete1 of 1
Delete1 of 1
ReplyDeleteNo, with the lake house being a second home there is no rescission available.
Class Blog (1 of 1)
ReplyDeleteAllowable Rescission
The parents would not be able to peruse a rescission. Unfortunately for them, this is their daughter’s secondary home which removes the option of a 3-day right to rescind. If they were still adamant to be removed from the loan, the only way is to refinance and, in the refinance, remove the parents from any obligation to the loan.
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ReplyDeleteSorry but no rescission periods on second mortgages
Since this is not the borrowers primary residence, the parents, as co-signers, will not be able to pursue a rescission.
ReplyDeleteNo only rescission applies to a primary residence period none others
ReplyDelete1 of 1 Rescission:
ReplyDeleteNo.
Loan closed and no rescission on 2nd homes.
Unfortunately, this is not an option for the parents to back out because they are not able to rescind due to the fact that the lake house is not the primary residence.
ReplyDelete