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Right to rescind mortgage - Louisiana
Posted on 3/10/19 at 5:03 pm
Posted on 3/10/19 at 5:03 pm
Does Louisiana have a right to rescind a mortgage or in this case a business line of credit?
Full story:
Client had an unsecured 75k business line of credit with around a 22k balance. Bank calls and offers him a 150k line with a lower rate but wants the office building as collateral. Client agrees and signed loan documents. I told him he made a mistake because he rarely ever carries a balance and now they have second lien position on his property. He now wants to cancel/rescind the line. He signed it around 11:00 am Thursday morning. Is he stuck?
Full story:
Client had an unsecured 75k business line of credit with around a 22k balance. Bank calls and offers him a 150k line with a lower rate but wants the office building as collateral. Client agrees and signed loan documents. I told him he made a mistake because he rarely ever carries a balance and now they have second lien position on his property. He now wants to cancel/rescind the line. He signed it around 11:00 am Thursday morning. Is he stuck?
9
Posted on 3/10/19 at 5:05 pm to SippyCup
I’m an expert: tree fiddy he screwed
Posted on 3/10/19 at 5:05 pm to SippyCup
Oh shite baw... he definitely got the tree fiddy
Posted on 3/10/19 at 5:06 pm to SippyCup
I believe that rescission only applies on a mortgage against the primary residence.
Posted on 3/10/19 at 5:08 pm to SippyCup
Their are 3 day rights of rescissions on lines of credit in the state of Louisiana. I work with HELOCs everyday.
If he signed Thursday, he has until midnight Monday night to cancel.
If he has a copy of his paperwork, he should have a document called right to cancel or something along those lines. May be coupled with a document showing youre establishing an account/line or credit.
If he signed Thursday, he has until midnight Monday night to cancel.
If he has a copy of his paperwork, he should have a document called right to cancel or something along those lines. May be coupled with a document showing youre establishing an account/line or credit.
This post was edited on 3/10/19 at 5:11 pm
Posted on 3/10/19 at 5:10 pm to SippyCup
Stupid question. Can he just not use the money, repay the loan, and just pay the fees.
Posted on 3/10/19 at 5:15 pm to bubbz
quote:
Their are 3 day rights of rescissions on lines of credit in the state of Louisiana. I work with HELOCs everyday.
This is a Federal Law and it only applies to consumer loans secured by a mortgage on the borrower's principal residence. It does not apply to commercial loans, regardless of whether the loan is secured by someone's house.
Posted on 3/10/19 at 5:21 pm to AUCE05
quote:If I understand correctly, it's not a loan. The bank just converted the balance on an unsecured line of credit into a larger LOC with the property as collateral if he doesn't pay the existing balance. Before, they'd have to take him to court to get any money out if he didn't pay the existing balance, but now, the property is encumbered with a second lien and the bank can take the property to satisfy the LOC (after making the first lienholder whole, I think) if he doesn't pay.
Stupid question. Can he just not use the money, repay the loan, and just pay the fees.
Posted on 3/10/19 at 5:22 pm to Kim Jong Ir
quote:
Their are 3 day rights of rescissions on lines of credit in the state of Louisiana. I work with HELOCs everyday.
Great!
quote:
This is a Federal Law and it only applies to consumer loans secured by a mortgage on the borrower's principal residence. It does not apply to commercial loans
Oh Damn!
So what are his options to have the second lien removed? Payoff the balance and close the line?
Posted on 3/10/19 at 5:22 pm to SippyCup
ROR is only on your primary residence. This loan funds at the table and checks have probably been cut.
Posted on 3/10/19 at 5:26 pm to tiger94gop
To
To my knowledge, they missed signing one paper and had to go back on Friday, which they did not. It was the agreement to provide insurance. He was told the signing of the other documents made it official. I think his bank is trying to screw him. He was not provided with nay copies of closing documents, which I find odd.
quote:
This loan funds at the table and checks have probably been cut.
To my knowledge, they missed signing one paper and had to go back on Friday, which they did not. It was the agreement to provide insurance. He was told the signing of the other documents made it official. I think his bank is trying to screw him. He was not provided with nay copies of closing documents, which I find odd.
Posted on 3/10/19 at 5:26 pm to TigerstuckinMS
Ahh.
Posted on 3/10/19 at 5:27 pm to tiger94gop
quote:
ROR is only on your primary residence.
and only if the loan is a consumer loan (personal, family, household purposes). If you secure a business/commercial loan with a mortgage on your house, there is no ROR.
This post was edited on 3/10/19 at 5:28 pm
Posted on 3/10/19 at 5:29 pm to Kim Jong Ir
quote:
and only if the loan is a consumer loan (personal, family, household purposes). If you secure a business/commercial loan with a mortgage on your house, there is no ROR.
I believe, not certain, the loan is secured with a commercial rental property which he personally owns, not the business.
Posted on 3/10/19 at 5:41 pm to Kim Jong Ir
quote:
This is a Federal Law and it only applies to consumer loans secured by a mortgage on the borrower's principal residence. It does not apply to commercial loans, regardless of whether the loan is secured by someone's house.
And only applies to refinances
Edit: I have no idea about the laws around commercial loans
This post was edited on 3/10/19 at 5:42 pm
Posted on 3/10/19 at 5:46 pm to SippyCup
I love how people say, “I do this every day” and give the wrong information. 
‘Three day right to cancel’ ONLY applies to loans in which the primary residence is taken for collateral. This does not apply to commercial property.
‘Three day right to cancel’ ONLY applies to loans in which the primary residence is taken for collateral. This does not apply to commercial property.
This post was edited on 3/10/19 at 5:47 pm
Posted on 3/10/19 at 5:49 pm to SippyCup
And also:
Sounds like you gave bad advice.
He could very well benefit from having a higher line and if the new interest rate is saving him money, who cares if they have a second on his property?
He can pay it off any time he wants.
quote:
I told him he made a mistake because he rarely ever carries a balance and now they have second lien position on his property. He now wants to cancel/rescind the line. He signed it around 11:00 am Thursday morning. Is he stuck?
Sounds like you gave bad advice.
He could very well benefit from having a higher line and if the new interest rate is saving him money, who cares if they have a second on his property?
He can pay it off any time he wants.
This post was edited on 3/10/19 at 5:50 pm
Posted on 3/10/19 at 5:56 pm to pwejr88
quote:
Sounds like you gave bad advice
75k unsecured line at 5.4 -v- 150k secures lone at 4.8
He has not and most likely never will need the full 75k. In my opinion, he gave the bank the benefit.
Posted on 3/10/19 at 6:00 pm to DavidTheGnome
quote:
This is a Federal Law and it only applies to consumer loans secured by a mortgage on the borrower's principal residence. It does not apply to commercial loans, regardless of whether the loan is secured by someone's house.
And only applies to refinances
Edit: I have no idea about the laws around commercial loans
Refinances with the same lender are only rescindable for new money (money over the amount paid off for original loan), otherwise they are fully rescindable during the rescission period. Refinances are not the only loans which can be rescindable. Generally the loan has to be nonpurchase money so second mortgages may be rescindable, as well as those taken out on residences which are owned free and clear. And as pointed out they have to be primarily for personal, family or household purposes. The OP’s client’s LOC doesn’t qualify.
Posted on 3/10/19 at 6:01 pm to SippyCup
quote:
he gave the bank the benefit
By giving them less money a month from interest payments?
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