TILA Mortgage Loan Officer Practice Test

The Right of Rescission is a consumer protection provision under the Truth in Lending Act (TILA) that allows borrowers to cancel certain types of loans within a specified time frame, usually three business days after loan closing. This right is designed to give borrowers a chance to reconsider their decision and protect them from predatory lending practices.

In most cases, a borrower cannot waive their Right of Rescission. TILA's regulations state that this right is fundamental to consumer protections, and it is not something that can be voluntarily given up by the borrower. The law aims to ensure that consumers have time to reflect on their decision without the pressure of the loan being in effect.

In specific circumstances, such as when a borrower needs to purchase or refinance a home immediately to avoid loss, they may be able to waive the Right of Rescission under certain conditions; however, these situations are rare and generally not applicable to the majority of loans. Therefore, stating that a borrower cannot waive their Right of Rescission, in most cases, accurately reflects the intention and regulation of TILA, reinforcing the importance of protecting consumers in the lending process.