Loan Auditors

The Truth In Lending Act of 1968 gave every consumer of mortgage products a right to rescind their loan under certain conditions. A rescission is a voiding of your contract. Straight from the Act itself:

When a consumer rescinds a transaction, the security interest giving rise to the right of rescission becomes void, and the consumer shall not be liable for any amount, including any finance charge.

Your right to rescission is absolute. There are certain and specific conditions that allow a borrower to rescind their loan. Furthermore, your lender must include a right to rescind disclosure statement with your closing documents - two copies.

The only time you do not have a right to rescind your loan is when you waive that right. From the Act:

The consumer may modify or waive the right to rescind if the consumer determines that the extension of credit is needed to meet a bona fide personal financial emergency. To modify or waive the right, the consumer shall give the creditor a dated written statement that describes the emergency, specifically modifies or waives the right to rescind, and bears the signature of all the consumers entitled to rescind.

It’s important to realize that if you exercise this waiver then you are giving up any future rights to rescind your loan. That means if you have just cause to rescind then you can’t. Before you sign a waiver of your rights, get a forensic loan audit to determine if your lender has violated any local, state, or federal laws with regard to your loan. If so then you’ll want to rescind your loan and/or seek to modify it.