TRID review triggers battle over refi rescission rules

Mortgage industry groups and consumer advocates are clashing over the 'Right of Rescission' rule during a review of TRID regulations. Currently, federal law gives borrowers a three-day window to cancel a refinance or home equity loan after signing the paperwork. For contractors and home improvement retailers, this rule is a major factor in project scheduling. You cannot legally start work or pay out funds until this cooling-off period expires. The Mortgage Bankers Association is pushing the CFPB to eliminate or shorten this window. They argue it is a relic of the past that delays funding and creates unnecessary paperwork. On the other side, consumer protection groups argue that this 'cooling-off' period is the only thing stopping predatory lenders from trapping homeowners in bad deals. If the rules change, it could significantly speed up your time-to-funding for large-scale home renovations financed via equity. Instead of waiting the mandatory three business days plus mail time, you could potentially receive project deposits and begin work immediately upon signing. For now, however, the three-day rule remains a firm barrier in your cash flow cycle. Keep a close eye on this, as any shift would require an immediate update to your contract signing and project start-date protocols.

Source: American Banker — Top News

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