FAQ: How are Rescission Dates Calculated in Charlie

What is a Rescission Date?

The rescission date in a mortgage loan refers to the deadline by which a borrower can cancel or "rescind" the loan agreement without penalties. This applies primarily to refinancing loans, allowing borrowers a brief period to reconsider their decision. The rescission period typically lasts three business days after the loan closing date, as required by law for certain transactions to protect borrowers from rushed financial commitments.

How is the Rescission Date Calculated in Charlie?

Charlie’s system automatically determines the rescission date based on loan type, property usage, and available closing dates.

Step-by-Step Calculation Process:

1. Determine the base date to use:

   • If available, use the Actual Closing Date.
   • If not, use the Loan Scheduled Closing Date.
   • If neither is available, use the Loan Estimated Closing Date.

2. Check if the loan qualifies for a rescission period:

   • Loan Type must be Refinance.
   • Property Usage must be Primary Residence.

3. Calculate the Rescission Date:

   • Add three business days to the base date.
   • Charlie’s system will automatically calculate and adjust the rescission date based on closing dates and qualifying conditions based on the following rule logic:
     • Auto-Fill Rules:

       IF Loan Purpose Type = 'Refinance' AND

       Property Usage Type = 'Primary Residence' THEN

       Populate 'Rescission Date' with the Date Variable + 3 Business Days (see date variables below).

       Date Variables:  Use Recission Date if the following are not true

       • Use Actual Closing Date if it is not null or blank.

       • Use Loan Scheduled Closing Date if it is not null or blank.

       • Use Loan Estimated Closing Date if it is not null or blank.

Example Scenario:

• Actual Closing Date: October 1, 2024
• Loan Purpose: Refinance
• Property Usage: Primary Residence

Calculation:

• Since the actual closing date is available, it becomes the base date: October 1, 2024.
• The loan qualifies for rescission (Refinance + Primary Residence).
• Adding three business days, the rescission date is determined as October 4, 2024.

Key Takeaways

• The rescission period applies only to refinance loans on primary residences.
• It lasts three business days from the determined closing date.
• Charlie automates the calculation using a hierarchy of closing dates.