Does the right of rescission apply to a loan secured by a mobile home owned by the borrowers?

The correct answer is that the right of rescission does apply to a loan secured by a mobile home owned by the borrowers. Under the Truth in Lending Act (TILA), the right of rescission is typically granted when a borrower enters into a transaction secured by their principal dwelling and involves certain types of loans.

When it comes to loans secured by mobile homes, the key factor is whether the mobile home is considered the borrower's primary residence. If it is, the borrower maintains the right of rescission, which allows them to cancel the loan agreement within three business days after closing. This provision is designed to protect consumers by providing them with a window of opportunity to reconsider their decision after they have had time to review the terms and disclosures provided.

Conditions that can influence the right of rescission typically relate to the nature of the transaction rather than the type of secured property. For instance, certain exceptions may exist for specific types of loans or refinancing transactions, but as long as the mobile home is the primary residence, the borrower retains that right. This enables borrowers to make more informed decisions and provides a safeguard against potentially harmful lending practices.