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What if you get cold feet shortly after you sign the loan papers? Don't worry. Federal credit law—Truth in Lending Act (TILA), gives consumers a "right of recission," allowing them to cancel a home equity loan contract within three days for any reason.
The three days (Sundays and legal holidays won’t be counted) begin only after all three of the following things happen: the loan contract is signed, the signer receives disclosures of all loan terms as required by TILA and also receives two copies of a "Notice of Right to Cancel," explaining the right of recission.
To cancel the contract, you most notify the lender in writing. Send your letter by certified mail by the third day with a return receipt requested. Also fax the letter or send an e-mail to immediately notify the lender. Keep copies of your letter and all other paperwork.
If you choose to cancel, your closing costs will be refunded to you. The lender must remove any liens placed on your property within 20 days. You will be required to return any loan proceeds that have been advanced to you.
Copyright © 2006 Loan Mortgage Broker Information. Send comments here.
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