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By JAY ROMANO The New York Times, April 24, 2007 Q. When there is a three-day right of rescission on a mortgage, how is that time period calculated? A. Michael Moskowitz, the owner of Equity Now, a Manhattan mortgage lender, said that by definition, the three-day right of rescission - that is, the time between when a borrower signs the mortgage documents and when the proceeds of the mortgage are disbursed - is three full business days. "Saturday is considered a business day, but Sundays and federal holidays aren't," Mr. Moskowitz said. So, for example, if a mortgage closes on a Monday, the three-day rescission period would consist of Tuesday, Wednesday and Thursday, and the loan proceeds would be disbursed on Friday. If the closing takes place on a Friday, the proceeds would be disbursed on the following Wednesday. Mr. Moskowitz said that the right of rescission is a federally mandated cooling-off period in which the borrower can back out of a mortgage. The right of rescission is generally required on refinances, second mortgages and lines of credit on the primary residence. It is not required for mortgages used to buy a property - including a primary residence - or for any mortgage on a second home or investment property. If a borrower exercises the right of rescission - by notifying the lender within the three-day period that he does not want to go through with the loan - the lender must return, within 20 days, any fees paid. Address questions to Real Estate Q&A, The New York Times, 229 West 43rd Street, New York, N.Y. 10036, or by e-mail to realestateqa@nytimes.com. Answers can be given only through the column. Please include name, address and daytime telephone. |
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