Right of Rescission

The Truth in Lending Act (TILA), a federal law in the United States, grants borrowers the right to revoke a home equity loan or home equity line of credit (HELOC) with a new lender within three days of closing, as well as the right to revoke a refinance transaction with a lender other than the current mortgagee. The lender must hand up its claim to the property and reimburse all fees within 20 days of utilizing the right of revocation, provided without any conditions.

The TILA safeguards the general public against unfair and erroneous credit billing and credit card activities. It mandates, among other things, that lenders give borrowers pertinent information about their loans and the option to terminate them. To safeguard consumers from dishonest lenders, the right of rescission was established, providing borrowers with a cooling-off period and the opportunity to change their minds.