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.
Guam Right to Rescind When Security Interest in Consumer's Principal Dwelling is Involved — Rescission In Guam, consumers are granted the right to rescind or cancel certain contracts that involve a security interest in their principal dwelling. This legal provision serves to protect consumers from entering into agreements that could compromise their homeownership rights. The right to rescind allows consumers to reconsider their decisions and withdraw from binding contracts, ensuring their financial security and peace of mind. Under Guam's law, there are two main types of rescission applicable when a security interest in a consumer's principal dwelling is involved: 1. Mandatory Rescission: This type of rescission is triggered when a lender fails to provide the consumer with accurate and complete disclosures related to the loan transaction within the specified time frame. According to the Truth in Lending Act (TILL), lenders must provide borrowers with proper loan disclosures, including information on interest rates, payment terms, fees, and any potential legal consequences. Failure to disclose this information may result in the consumer having an extended right to rescind the mortgage loan. 2. Voluntary Rescission: On the other hand, voluntary rescission is initiated by the consumer's own choice to cancel the contract within the applicable rescission period. Although lenders are not legally required to accept voluntary rescission, they may choose to do so to maintain a positive relationship with the consumer. This type of rescission often arises when the consumer realizes they may have made a hasty decision or finds more favorable loan terms elsewhere. The rescission process typically involves the consumer notifying the lender in writing about their intent to cancel the contract. The notice should clearly state the reasons for rescission and indicate the desire for a return of all payments made to the lender. Upon receiving the rescission notice, the lender is obligated to cancel the contract, return any payments received, and release any security interest in the consumer's principal dwelling. It is crucial for consumers to be aware of their rights and obligations when it comes to rescission in Guam. This protection ensures that they can make informed decisions regarding their home loans, safeguarding themselves from any potential financial harm or predatory lending practices. By staying informed and exercising their right to rescind when applicable, consumers can maintain control over their homeownership journey and secure their best interests.
