Which of the following is NOT a rescindable transaction?

Which of the following is NOT a rescindable transaction?

• A. A home equity line of credit secured by a second mortgage on the borrower's principal dwelling
• B. The Millers are selling their current home while they build a new home.
• C. A 30-year mortgage loan used to purchase a new home
• D. The Wankhedes are buying a vacation home in Napa Valley.

Answer: (C)

The scenario associated with a 30-year mortgage loan used to purchase a new home is not a rescindable transaction because such loans typically fall outside the bounds of the Right of Rescission as defined by the Truth in Lending Act. The Right of Rescission allows borrowers to cancel certain types of credit transactions, specifically for loans secured by a borrower's primary residence under Regulation Z. Since a mortgage used to purchase a new home is not classified as a home equity transaction, it does not provide the borrower with the right to rescind within three days of closing. In contrast, home equity lines of credit, which are secured by the borrower's principal dwelling, qualify for rescission rights. Similarly, transactions that involve refinancing or home equity also allow for rescission because they can put the borrower at a risk with respect to their primary dwelling. The other options relate to situations where the Right of Rescission applies, as they either involve secondary homes or specific financing situations that do allow for rescission rights.

The scenario associated with a 30-year mortgage loan used to purchase a new home is not a rescindable transaction because such loans typically fall outside the bounds of the Right of Rescission as defined by the Truth in Lending Act. The Right of Rescission allows borrowers to cancel certain types of credit transactions, specifically for loans secured by a borrower's primary residence under Regulation Z.

Since a mortgage used to purchase a new home is not classified as a home equity transaction, it does not provide the borrower with the right to rescind within three days of closing. In contrast, home equity lines of credit, which are secured by the borrower's principal dwelling, qualify for rescission rights. Similarly, transactions that involve refinancing or home equity also allow for rescission because they can put the borrower at a risk with respect to their primary dwelling. The other options relate to situations where the Right of Rescission applies, as they either involve secondary homes or specific financing situations that do allow for rescission rights.