What is an essential requirement before a borrower can exercise the right to rescind?

For a borrower to exercise the right to rescind under the Truth in Lending Act (Regulation Z), it is essential that they have received proper disclosures. This requirement ensures that the borrower is fully informed about the terms and conditions of the loan, including the costs, fees, and any other pertinent information regarding the transaction. Proper disclosures provide the necessary context for the borrower to make an informed decision about whether to proceed with or back out of the loan. Without these disclosures, the borrower lacks the fundamental information needed to understand the implications of the agreement, which is crucial for the rescission right to be valid.

While the other options touch on relevant aspects of lending, they do not fulfill the primary requirement for resuming rescission rights. For example, while it is true that the property must be the borrower's primary residence for the right to rescind to apply, the foundational requirement remains the necessity of receiving proper disclosures which lays the groundwork for the borrower's informed decision-making.