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Notary Signing Agent Document FAQ: Notice Of Right To Cancel

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Notary Signing Agents must deal with many different documents during loan signings. Some require special instructions. In this article, we answer frequently asked questions about the Notice of Right to Cancel (NRTC) form.

What is the purpose of a Notice of Right to Cancel form?

Under federal law, some — but not all — mortgages include a right of rescission, which gives the borrower 3 business days following the signing of a loan document package to review the terms of the transaction and cancel the transaction. The rescission period starts the first business day following the date of signing  and ends at midnight on the third business day. Sundays and federal holidays do not count toward the rescission period.

If a mortgage transaction includes a rescission period, the borrower will be provided with a Notice of Right to Cancel informing them of their right to rescind the loan, the dates of the rescission period, and instructions how to cancel.

Are there other terms for a Notice of Right to Cancel form?

Yes. Depending on the lender, a Notice of Right to Cancel may be titled “Notice of Right of Rescission” or “Notice of Your Right to Cancel Credit Transaction Secured by Your Home” or possibly by other names.

What types of loan document packages include a Notice of Right to Cancel form?

Examples of loans that include a Notice of Right to Cancel form include refinance loans in which the borrower is changing lenders; home equity loans and lines of credit and “cash-out” refinance loans (loans for more than the current loan balance and taking the difference in cash) with a different lender.

Mortgage loans used to buy a house (aka purchase transactions) or to refinance a loan with the same lender, mortgage loans from state agencies and mortgage loans for homes that are not a primary residence (vacation homes and income properties) do not include a right of rescission, so no Notice of Right to Cancel form is provided with these types of loan document packages.

Does a Notice of Right to Cancel form require notarization?

No. However, the Signing Agent must print out and provide two copies of the NRTC form for each borrower and one to sign and return with the completed loan document package.

What If the Applicable Dates are preprinted on the NRTC?

If the rescission dates are already filled in on the NRTC form, the Signing Agent must also check to confirm the rescission dates on the form. A rescission calendar is available online to help Signing Agents confirm the rescission dates are accurate. If the rescission dates have not been filled in, the Signing Agent will need to complete the correct dates in the form using a rescission calendar.

David Thun is an Associate Editor at the National Notary Association.

 

 

6 Comments

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Alan Rosenthal

13 Jan 2020

Thank you for this article! I have 2 questions. 1) If the dates are filled in, but they appear to not allow for Sundays and Holidays for the 3 business days, (and we can't get in touch with the lender as is sometimes the case). are you advising that we are to make changes that conform to the calendar? 2) Generally, we are making a client copy of the docs to leave with the signer. These, of course, are unsigned. Often, there are 3, 4, 5, 6, copies of the Notice of Right to Cancel. I've been leaving the unsigned 2 or more copies (along with the rest of their client copy of the package) with the signer and returning all signed docs to the lender or contracting company. Are we supposed to leave signed notices with the signer? Or simply allow them to get copies of all executed docs from their lender? Thanks!

National Notary Association

13 Jan 2020

Hi Alan. To help us answer your question, can you please tell us what state you are commissioned in? If you need an answer right away, you can also contact our NNA Hotline Team at hotline@nationalnotary.org. If you are not an NNA member, they will be happy to answer one complementary question.

Mike Holden

13 Jan 2020

I was told by a loan official that all types of refinancing loans etc. Even if it is not a primary residence, such as a rental property, can be canceled within 3 business days. They told me the the Right of Recision form is not required to be in the documents.

Lisa Bittner

13 Jan 2020

Thank you, I hope everyone reads this, we find this still the most elusive document.

Ginny

13 Feb 2020

What if a document is already notarized and signed by the notary before you are asked to sign it. Will it hold up in a lease agreement? Can the notary be penalized for doing this?

National Notary Association

14 Feb 2020

Based on what you’ve described, we think it would be best if you contacted our Hotline team by phone and provided them with a more detailed description of the situation. The NNA Hotline: 1-888-876-0827 Mon – Fri: 5:00 a.m. – 7:00 p.m. (PT) Saturday: 5:00 a.m. – 5:00 p.m. (PT) If you’re not an NNA Member or Hotline Subscriber, they will provide you with a one-time courtesy call.

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