Originally published Saturday, January 12, 2008 at 12:00 AM
Real estate how-to
There's a way to cancel a mortgage loan
Having buyer's remorse about a mortgage? It can pay to scrutinize the fine print.
Having buyer's remorse about a mortgage? It can pay to scrutinize the fine print.
Amid the housing-market turmoil, homeowners have been turning to a little-known process for renegotiating or exiting a loan. Even minor paperwork slip-ups can be enough to get a "rescission" (basically, a loan cancellation) based on the Truth in Lending Act, a federal law requiring disclosure of a loan's key terms.
How does it work?
Under a rescission, while a homeowner still owes the principal, the lender won't be able to foreclose. Plus, all loan-related fees and interest are subtracted from the principal, which can mean substantial savings for the borrower.
After a rescission, the borrower must pay off the loan, typically with a new mortgage, or sell the house.
It isn't for everyone. Borrowers have three years after the loan is made to make a rescission claim. It is available only to people who refinanced their original mortgage on their primary residences.
Until recently, some judges were loath to cancel loans where the only violations were paperwork mistakes, says Ira Rheingold of the National Association of Consumer Advocates, a group of consumer attorneys. Now that foreclosures are mounting, "courts have gotten more sensitive" to violations, he says.
Many small foul-ups can qualify.
Lawyers say such discrepancies aren't unusual, especially given how aggressive lenders have been in recent years.
— By Amir Efrati,
The Wall Street Journal
Copyright © 2008 The Seattle Times Company
June home sales are highest in King County since Oct. 2007
Property taxes: Appeals shoot up in King, Snohomish Counties
Owe more than your home is worth? You can still refinance, but it's complicated
"Jewel-box" houses are built smaller, smarter

Gen. David Petraeus: Iraq and Afghanistan Wars
Watch highlights of General David Petraeus discussing the Iraq and Afghanistan War at the Global Leadership Series sponsored by the World Affairs Council.
Entertainment | Top Video | World | Offbeat Video | Sci-Tech
nwjobs

Post a comment

Michelle Goodman blogs about work/life balance.
What not to wear to work this summer
Post a comment
nwautos

Choosing a new sedan? Weigh the impact of your choice on your wallet and on the planet.
Post a comment
nwhomes

Find a new home or condo that fits your lifestyle.
Search New Developments
Builder Directory
- Key lawmakers warn of Boeing no-strike ultimatum
- Hemmed-in Ballard house to rise above
- Seattle-area homebuilder losing projects to foreclosure
- Health-plan costs soar for individuals
- UW Football | Tailbacks David Freeman, Brandon Johnson ineligible
- Drunken man shocks Spain with his generosity
- Trees vs. houses: Narrow, leafy street is last chance for two Madrona homes waiting to be moved
- Experts work to untangle US, Korea cyber attack
- Nickels gives City Light chief $40,000 bonus
- Coffee City | New "sexpresso" stand coming to Ballard
- Mass. files lawsuit against federal marriage law
911 - Key lawmakers warn of Boeing no-strike ultimatum
612 - Health-plan costs soar for individuals
471 - Teen charged in pit bull attacks ordered held after pleading not guilty
144 - Sheriff's Office: Man not armed when fatally shot by deputy
121 - Trees vs. houses: Narrow, leafy street is last chance for two Madrona homes waiting to be moved
86 - World's largest solar plant may be built in Cle Elum
84 - Wednesday night notes
76 - Pay parking in West Seattle?
74 - House Dems want to expand secret briefings
61
- Seattle-area homebuilder losing projects to foreclosure
- Hemmed-in Ballard house to rise above
- Key lawmakers warn of Boeing no-strike ultimatum
- Health-plan costs soar for individuals
- World's largest solar plant may be built in Cle Elum
- Rick Steves' Europe | Beware of new and classic travel scams
- Happy Hour | Ruth's Chris has super rib-eye sliders and quality cocktails
- Trees vs. houses: Narrow, leafy street is last chance for two Madrona homes waiting to be moved
- Grab the kids and hop on Amtrak for a stress-free getaway to Portland
- All You Can Eat | "Top Chef": Seattle chefs tapped for Bravo knife fight in Vegas!





