A homeowner who refinances her home mortgage may cancel the transaction:

Question

Quizplus · Accepted Answer

The federal Consumer Credit Protection Act allows homeowners to cancel a mortgage refinance transaction before midnight of the third full business day after the transaction, without penalty and for any reason. This is known as the right of rescission. Option A is incorrect because a change in the terms of the contract is not sufficient cause to cancel the transaction. Option C is incorrect because fraud is not the only reason a homeowner can cancel the transaction, and option D is incorrect because there is no such FTC rule requiring a $1,000 penalty.

A Homeowner Who Refinances Her Home Mortgage May Cancel the Transaction