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Who does the right of rescission apply to when refinancing a loan?

Right of Rescission. Does right of rescission apply to the father and the wife in the following scenario? 
My bank is refinancing a loan on a primary residence. The current owner/borrower is adding both his father, who lives in another state, and the borrower's new wife to the deed. Both the wife and father of the original borrower will be also be liable on the loan. Clearly, the husband has the right to rescind. The debate in our office is whether the wife and father also should be given the right to rescind. On one hand, the wife and father may not have the right to rescind because the wife and the father had no ownership interest in the property prior to the refinance, and therefore have no equity to protect – which is the purpose of the right of rescission. Further, the father may not have the right to rescind on the basis that he is not using the property as his primary residence. 
Do the father and wife have the right to rescind?

Yes. State marital property laws aside, §1026.23 of Regulation Z provides that in a credit transaction where a security interest will be retained 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. Since both the wife and the father are being added to the deed, they have (1) an ownership interest (2) that is going to be the subject of the security interest. This makes sense. The refinance loan puts at risk the wife’s and father’s ownership interest (equity), as they are now part-owners of the property.

Another question is whether the father has the right to rescind, even though he is not living in the property. A commonly misunderstood aspect of the right of rescission is that it only applies to individuals who live in the subject property as their primary residence. This is incorrect. If just one owner has both primary residency and ownership, all owners have the right to rescind. Sections 1026.15(a)(1)(i) (open-end) and 1026.23(a)(1) (closed-end) of Regulation Z provide that in a credit plan or transaction in which a security interest is or will be retained…in a consumer's principal dwelling, each consumer whose ownership interest is…subject to the security interest shall have the right to rescind…" (June 2016)

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