In a credit transaction in which a security interest is or will be retained or acquired in a consumer's principal dwelling, each consumer whose ownership is or will be subject to the security interest has the right to rescind the transaction. Lenders are required to deliver two copies of the notice of the right to rescind and one copy of the disclosure statement to each consumer entitled to rescind. The notice must be on a separate document that identifies the rescission period on the transaction and must clearly and conspicuously:
" disclose the retention or acquisition of a security interest in the consumer's principal dwelling;
" the consumer's right to rescind the transaction; and
" how the consumer may exercise the right to rescind with a form for that purpose.
In Virginia, the right to rescind when a security interest in a consumer's principal dwelling is involved is an important protection for consumers. This right allows individuals to cancel certain types of loans or contracts within a specific timeframe, providing them with the ability to undo certain agreements and potentially avoid financial harm. When a security interest in a consumer's principal dwelling is involved, the right to rescind is typically related to mortgage loans or home equity loans. This right is governed by the Federal Truth in Lending Act (TILL) and it's implementing regulation, Regulation Z. Under TILL and Regulation Z, consumers have the right to rescind certain loans secured by their primary residence, such as refinances or home equity loans, within a three-day period. If a lender fails to comply with the disclosure requirements of TILL or Regulation Z, the right to rescind may be extended up to three years from the date of loan consummation. This extended right to rescind is intended to protect consumers from unscrupulous lending practices or inadequate disclosures that could potentially harm their financial well-being. It is important to note that the right to rescind when a security interest in a consumer's principal dwelling is involved is not applicable to all types of loans or contracts. It specifically applies to loans secured by the borrower's primary residence, ensuring that individuals have enough time to carefully review loan terms, interest rates, and other important details before making a long-term financial commitment. In summary, the right to rescind when a security interest in a consumer's principal dwelling is involved is a valuable protection for Virginia residents. It allows them to cancel certain loans or contracts related to their primary residence within a specific timeframe, providing an opportunity to reconsider and potentially avoid financial harm. By understanding and exercising this right, consumers can ensure they make informed and confident decisions regarding their housing-related finances.
Para su conveniencia, debajo del texto en español le brindamos la versión completa de este formulario en inglés. For your convenience, the complete English version of this form is attached below the Spanish version.
