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We have a consumer home loan that is a refinance of debt secured by their principal dwelling and giving them cash. This is refinancing another Lender’s debt. We are unsure which Recission Model Form to use. Are we to use the one stating “You are entering into a new transaction to increase the amount of credit provided to you”. (H-9) OR do we use the one that states “You are entering into a transaction that will result in a mortgage on your home”?
Sandy – There are seven different model rescission forms. There are five for open-end credit and two for closed-end credit. You didn’t mention whether the credit was open-end or closed-end credit.
Assuming it is closed-end credit, the correct model form when refinancing another creditor’s debt is Model form H – 8 (General). The H-9 form is used when refinancing your own debt, with new money.
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