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Right of Rescission - Refinancing
Question: When do we have to give the Reg Z right of rescission notice on a refinancing?
Answer: In two cases: when a different institution is doing the refinancing or when the refinancing involves an advance of additional funds. If the same bank is refinancing the debt, then the right of rescission applies only as to the new funds that are advanced. A refi with new money could occur not only with a home equity loan but also when home improvements are added to an existing loan or after a divorce when one person is paying off the ex. In the latter scenario, the transaction with the ex is supported by an "owelty" lien (which is one of the permitted liens against the homestead).
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