what is the right of rescission 
the right of rescission is a legal right outlined in the federal truth in lending act tila that allows a borrower to cancel or rescind certain types of home loans within three days of closing on the loan this right is provided on a no questions asked basis and the lender must give up its claim to the property and refund all fees within 20 days of the borrower exercising their right of rescission 1understanding the right of rescissionthe tila enacted in 1968 and amended over the years is intended to curtail unfair and deceptive credit billing and credit card practices among other things it requires lenders to provide borrowers with relevant information about home loans and the right to cancel them in some instances the right of rescission was created to protect consumers from unscrupulous lenders giving borrowers at least a brief cooling off period and time to change their minds 2not all loan transactions come with the right of rescission it applies only to loans that use the person s existing home as collateral including certain home equity loans home equity lines of credit helocs reverse mortgages and refinances of mortgages it does not apply to mortgages used to buy or build a home or to purchase a second home or an investment property 34in addition the right does not apply if you are refinancing your mortgage with the same lender and aren t borrowing additional money as part of the refinance nor does it apply if your lender is a state agency however the federal trade commission ftc says you may have other cancellation rights under state or local law 4an eligible home can include a house condominium mobile home or houseboat 4