As per the Truth in Lending Act, the right to rescission helps a borrower to cancel home loans of certain types within three days of closing. This right is offered on a “no-questions-asked basis”. The lender will have to refund all the fees within 20 days of exercising of the rights and also give up its claim over the property.

How to exercise right of rescission:
You’ll have to inform the lender in writing if you want to exercise the right of rescission. A phone call will not help you in this case. You’ll have to drop the letter in a mailbox within the deadline of 3 days. However, it is not necessary that the letter has to be postmarked.

Calculating the 3-day rescission period:
After the closing of a loan, you’ll get 3 business days time to rescind your loan. Weekends or holidays will not be a part of the time period. So, how can we define a business day? Well, every day except Sundays and federal holidays is a business day. You will find that though the lender’s office is closed on Saturday, it will be counted as a business day.   The time period expires on the midnight of the third full business day after your loan documents are signed.

Type of homes that qualify for right of rescission:
Types of homes don’t really matter in this case. Your property can be a condominium, a floating home, single-family house or a manufactured home permanently attached to the land. In all these cases, you would still have the rights to rescind a loan.
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