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We are originating a HELOC loan to fully pay off an existing HELOC loan. Since there is no new money involved, would Right of Rescission apply?


Answer:

Since the property is being deeded over to the borrower, the borrower is essentially purchasing the property for what is remaining Yes. Although no new money is being advanced, this is a new HELOC that will allow a customer to redraw on funds from the line once the loan is paid down. The Right of Rescission would apply to any new advances. If the Right of Rescission is not provided to the customer at the time of account opening, a Right of Rescission would have to be provided to the customer with each advance on the line and a three-day waiting period would occur..


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