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Right of Recession

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  • #2462
    GVICK
    Participant

    Jack, We have a customer that is wanting to consolidate all of their business and consumer loans into one loan with us using their personal residence to secure the loan. All existing notes are already in our portfolio with the mortgage on the personal residence already in place. The loan amount will consist of about 70% of the business purpose dollars and 30% personal purpose. Since the business portion represents the larger loan purpose could the loan still be considered mainly busines purpose or should we give the right to rescend and provide all other disclosures that we would provide for a consumer residence loan?

    Thanks,
    Glenn

    #2777
    jholzknecht
    Keymaster

    The loan is primarily for business purposes, therefore Regulation Z does not apply and you don’t have to worry about the right of rescission.

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