Legal Question in Civil Litigation in Colorado

Loan cancellation

If you sign a borrowers agreement when applying for a loan

then find a loan with a lower rate, can you cancel the

initial loan as long as you have not received any money?

If there were any repercussions what could be expected?

This is on a mortgage purchase loan with an online lender.


Asked on 8/13/04, 7:32 am

1 Answer from Attorneys
David Colt Colt Law Firm, P.C.

Re: Loan cancellation

Hello:

Generally, Federal law provides for a three (3) day rescission period regarding mortgage purchases or refinance loans. When a lender makes these types of loans, it is required to disclose information about the rescission option. Generally, however, if the mortgage is not recinded within the 3 day period, it is binding and cannot be recinded. Generally, in order to rescind a loan, you must notify the lender in writing. You should look at the lender's website and your paperwork to see the requirements for recission.

I hope this helps. If you have further questions, feel free to call me, David Colt

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Answered on 8/13/04, 12:36 pm


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