Questions and Answers
If a borrower obtains a variable rate second mortgage on his primary residence to purchase a truck for his business (an LLC), is the loan subject to the right of rescission?
No. The right of rescission comes from the Truth in Lending Act (TILA). TILA does not apply to loans made for a business purpose. So even though the borrower's principal dwelling is securing the loan, the loan is not subject to TILA and, consequently, the right of rescission, because it is for a business purpose.
(Posted: 03/28/2008)
