Do not write me if your rescission is designed to allow you to profit from a decline in market interest rates that occurred after you locked the price. Both parties are bound by a lock agreement. The law authorizing rescission was designed to protect borrowers from being taken advantage of by unscrupulous lenders. It was not intended as a tool with which unscrupulous borrowers could take advantage of lenders.
If the decision is made to rescind, make sure you send the letter registered mail with return receipt requested. Otherwise, the lender can claim that the letter was not received on time.
Jack Guttentag is professor emeritus of finance at the Wharton School of the University of Pennsylvania.
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