[kmeade]

If a girlfriend and boyfriend get a joint loan and they use their primary residence as collateral, but the primary residence is in the girlfriend’s name only (both unmarried) does the boyfriend get a right to rescind if he lives in the property and is on the loan?

[rcooper]

Kmeade,
The confusion with this comes in because the statute wording is more ambiguous than the regulation. From reading the statute (15 USC 1635) it would seem to apply regardless of ownership interest. On the other hand the regulation gives us more detail and tells us ROR applies to a consumer whose principal dwelling will be used as collateral and that consumer has ownership in that collateral (see below). Based on the law you can offer ROR to those who use the collateral as their primary residence and don’t have ownership interest, but if you comply with the regulation it should not be an issue and you will be deemed to be in compliance with Regulation Z and the rescission rules.

1026.23(a) states:
Consumer’s right to rescind. (1) In a credit transaction in which a security interest is or will be retained or acquired in a consumer’s principal dwelling, each consumer whose ownership interest is or will be subject to the security interest shall have the right to rescind the transaction, except for transactions described in paragraph (f) of this section.

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