Inflation is pushing mortgage rates higher.
Notice of rescission
Notice of rescission is a term related to contracts. Bankrate explains.
What is a notice of rescission?
A notice of rescission is a form given with the intention of terminating a contract, provided that the contract entered into is a voidable one. It releases the parties from obligations set forth in the contract, effectively restoring them to the positions they were in before the contract existed.
A notice of rescission can be mutually agreed upon by both parties, or it can be done by one party in a contract for a legitimate cause. There are situations in which a notice of rescission cannot be applied. They are:
- When it is not possible for both parties to bring back pre-contract positions.
- When it would cause a problem to a third party who is part of the contract.
- When the party requesting the rescission is guilty of violating the contract, also known as having “unclean hands.”
- When the party requesting the rescission already has received monetary damages.
The first step in the process of rescinding a contract is to review the contract to see whether it can be rescinded. If not, the party requesting rescission should get in touch with a lawyer and check the laws of rescission for the state. The next step is to find out whether there are legal grounds to support the rescission, such as duress, a mistake or fraud. Lastly, a written notice should be issued to the other party. Then, negotiations or filing of a lawsuit may follow.
Notice of rescission example
A homebuyer who made an offer on a house wants to back out of the offer because he decides to make an offer on another house. His purchase offer was accepted and he and the seller had signed a sales contract. The buyer’s agent sends a notice of rescission to the listing agent so that the seller will know the deal is off. The notice is given within three business days, per the terms of the contract.
Did you know you have a brief window of time to back out of a mortgage refinance loan or a HELOC? Find out more.
More From Bankrate
3 min read Jun 29, 2022
Housing Heat Index: Which state real estate markets are doing the best, worst during the pandemic boom?
Utah and Arizona rank atop Bankrate’s Housing Heat Index. Louisiana is at the bottom.4 min read Jun 29, 2022
Think divorce is rough? Try dissolving the mortgage afterward. Here are some options.7 min read Jun 29, 2022
The term “first-time homebuyer” can be misleading.2 min read Jun 29, 2022
While an option for some borrowers, there are downsides.4 min read Jun 29, 2022
Here are some scenarios that might happen to you if you fail to pay your HOA fees.4 min read Jun 28, 2022
A portfolio loan can be attractive to borrowers in some situations.3 min read Jun 28, 2022
Here’s what to expect.5 min read Jun 27, 2022
To find out if your mortgage is transferable, it’s best to contact your lender.4 min read Jun 27, 2022