What happens once the rescission period is over?
After the right-of-rescission period has expired, make sure you feel reasonably certain that the consumer has not rescinded before you disburse the loan proceeds. There are some risks in disbursing after the third day. For example, the law allows consumers to exercise their rescission rights by mail, and a rescission is effective when mailed. Thus, a rescission mailed on the third day after closing is effective even though the lender may not receive it until the fourth or fifth day after the closing. Because of this potential timing problem, Regulation Z suggests that lenders take extra precautions to ensure that the loan has not been rescinded. To avoid further delay of the loan proceeds, you may want to obtain a confirmation statement from all the owners stating that they have not exercised their rescission rights. Such a written confirmation provides written documentation that the transaction has not been rescinded. Bankers Systems’ rescission forms contain this confirmation languag
