For closed-end loans, the model rescission forms are set forth in Appendix H of Truth in Lending (Regulation Z) and referenced in 12 CFR § 226.23.  Both the 1) general and 2) refinancing with the original creditor model forms are included in the Appendix.  Below are the Reg. Z model forms for closed end transactions and links to the DocMagic versions of these forms.  Keep in mind that there are many customized options available, but for brevity, only the DocMagic default versions are listed below.

1) Model Form H-8 (General)

Our modified form is NORTC.MSC.  This form is selected when the loan is a closed-end transaction, the property type is owner-occupied and not a second home, and the loan purpose is either a refinance, junior, 3^rd, 4^th, streamline refinance, home improvement, or home improvement consolidation.

2) Model Form H-9 (Refinancing with original creditor)

Our modified form is NORTCI.MSC.  This form is selected when the loan is a closed-end transaction, the property type is owner-occupied and not a second home, and the loan purpose is an increase in the amount of credit previously provided.

Please note, however, that some investors may have their own rescission forms or give us different form selection instructions.  In those cases, we will default to the investor's specifications.

DSI's Compliance Department invites you to review our other articles on the Notice of Right to Cancel:

• Borrower's Right to Rescind
• Open-End Loan Forms & Form Selection Logic
• Instructions for Completing a Notice of Right to Cancel Form

For open-end loans (i.e. HELOCs), the model rescission forms are set forth in Appendix G of Truth in Lending (Regulation Z) and referenced in 12 CFR § 226.15.  These forms address scenarios in which a consumer opens a HELOC account, increases the HELOC credit limit, adds a security interest, or increases the security.  Below is a list of the Reg. Z model forms, links to the DocMagic versions of the forms, and what logic is in place.

1) Model Form G-5 (When Opening an Account)

Our modified form is HENRCG5.HLC.  This form is selected when the loan type is an equity line, the property type is owner-occupied and not a second home, and the loan purpose is either a refinance, junior, 3^rd, 4^th, streamline refinance, home improvement, or home improvement consolidation.

2) Modified Model Form G-5 (When Funds are Used for Purchase)

When a loan has purchase money and non-purchase money funds, the non-purchase money funds are subject to the right of rescission, while the purchase money funds are not. In this scenario, our modified form is HENRCP.HLC.  This form is selected when the loan type is an equity line, the property type is owner-occupied and not a second home, and the loan purpose is either purchase or purchase money junior.  For more information about this form, see our prior article here.

3) Model Form G-7 (When Increasing the Credit Limit)

Our modified form is HENRCG7.HLC.  This form is selected when the loan type is an equity line, the property type is owner-occupied and not a second home, and the loan purpose is an increase in the credit limit.

Please note, however, that some investors may have their own rescission forms or give us different form selection instructions.  In those cases, we will default to the investor's specifications.

DSI's Compliance Department invites you to review our other articles on the Notice of Right to Cancel:

• Borrower's Right to Rescind
• Closed-End Loan Forms & Form Selection Logic
• Instructions for Completing a Notice of Right to Cancel Form

It is critical to correctly complete all dates on the Notice of Right to Cancel (NRTC) and assure that the notice is properly signed.  The below instructions provide general guidance regarding the preparation of the NRTC.  Click here for the model form that the below numbers 1-5 correspond to. Items 6-8 provide general information regarding this subject matter.

1. For the date of the transaction, enter the date on which the borrower(s) sign the Mortgage or Deed of Trust.

2. Enter the name and address of the lender where the borrower can notify the lender in writing, if the borrower decides to cancel.

3. Under the cancellation date, enter the date on which the rescission period will expire.  To calculate this date, add three business days (do not count Sundays or legal public holidays) to the latest of the events referenced in the NRTC.

4. Each person receiving the NRTC must sign and date the form.  Also, each party must receive two copies of the NRTC with the appropriate date of the transaction and expiration date.

5. The correct NRTC form must be used, which is determined by the type of transaction.  For more detailed information about what is required, for closed-end loans click here and for open-end loans click here.

6. If this notice is not prepared correctly (e.g., dates are missing or incorrect), the rescission right may extend for a period up to three (3) years.  To cure this rescission liability, creditor must re-open rescission and complete all of the steps that are required for a NRTC.

7. If there are multiple parties who sign on different dates, the latest date is used when calculating the rescission period.  It is best to have multiple parties sign on the same day.

8. The loan may not fund until the last rescission period has expired.1

DSI's Compliance Department invites you to review our other articles on the Notice of Right to Cancel:

• Borrower's Right to Rescind
• Closed-End Loan Forms & Form Selection Logic
• Open-End Loan Forms & Form Selection Logic

1 12 CFR § 226.23(c); 12 CFR § 226.15(c)