According to 12 CFR 226.23, 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 interest is or will be subject to the security interest shall have the right to rescind the transaction, with some exceptions. To exercise the right to rescind, the consumer shall notify the creditor of the rescission by mail, telegram or other means of written communication. Notice is considered given when mailed, when filed for telegraphic transmission or, if sent by other means, when delivered to the creditor's designated place of business. The consumer may exercise the right to rescind until midnight of the third business day following consummation, delivery of the notice
required by paragraph (b) of this section, or delivery of all material disclosures, whichever occurs last.
The Rhode Island Notice of Right of Rescission or Right to Cancel is an important legal document designed to protect borrowers who are obtaining a mortgage, lien, or security interest on their residence. It provides borrowers with the right to cancel or rescind their agreement with the lender within a specified timeframe without any penalties or obligations. This notice ensures that borrowers have sufficient time to carefully review the terms of their agreement and make an informed decision. In Rhode Island, there are different types of Notice of Right of Rescission or Right to Cancel, depending on the specific circumstances of the mortgage, lien, or security interest. These specific types include: 1. Primary Residence Mortgage: This notice is applicable when a borrower obtains a mortgage on their primary residence. It allows the borrower to cancel the mortgage agreement within three business days from the date of signing, excluding Sundays and federal holidays. 2. Home Equity Line of Credit (HELOT) Loan: When a borrower acquires a home equity line of credit loan, they are granted the right to cancel the loan agreement within three business days from the date of signing, excluding Sundays and federal holidays. 3. Refinancing Mortgage: If a borrower decides to refinance their existing mortgage on their primary residence, they are entitled to a right of rescission within three business days from the date of signing, excluding Sundays and federal holidays. 4. Second Mortgage or Subordinate Lien: When a borrower obtains a second mortgage or subordinate lien on their residence, they have the right to cancel the agreement within three business days from the date of signing, excluding Sundays and federal holidays. The purpose of these different types of Rhode Island Notices of Right of Rescission or Right to Cancel is to ensure that borrowers have sufficient time to consider their financial obligations and seek advice if needed before committing to a mortgage, lien, or security interest on their residence. It provides them with an opportunity to change their mind and cancel the agreement without facing any penalties or financial consequences. It is crucial for borrowers in Rhode Island to carefully review their loan documents and understand their rights and obligations before signing any agreements. They should consult with legal and financial professionals to ensure they are making informed decisions and protecting their interests. The Notice of Right of Rescission or Right to Cancel acts as an essential safeguard for borrowers, allowing them to exercise their right to cancel if they deem it necessary.
