Consumer Handbook to credit protection

Cancelling a Mortgage

Truth in Lending gives you a chance to change your mind on one n one important kind of transaction--when you use your home as securit for a credit transaction. For example, when you are financing a major repair or remodeling and use your home as security, you have three business days, usually after you sign a contract, to think about the transaction and to cancel it if you wish. The creditor must give you written notice of your right to cancel, and, if you decide to cancel, you must notify the creditor in writing within the three-day period. The creditor must then return all fees paid and cancel the security interest in your home. No contractor may start work on your home, and no lender may pay you or the contractor until the three days are up. If you must have the credit immediately to meet a financial emergency, you may give up your right to cancel by providing a written explanation of the circumstances.

The right to cancel (or right of rescission) was provided to d to protect you against hasty decisions--or decisions made under pressure--that might put your home at risk if you are unable to repay the loan. The law does not apply to a mortgage to finance the purchase of your home; for that, you commit yourself as soon as you sign the mortgage contract. And, if you use your home to secure an open-end credit line--a home equity line, for instance--you have the right the cancel when you open the account or when your security interest or credit limit is increased. (In the case of an increase, only the increase would be cancelled.) Lost or Stolen Credit Cards

If your wallet is stolen, your greatest cost may be ay be inconvenience, because your liability on lost or stolen cards is limited under Truth in Lending. You do not have to pay for any unauthorized charges made after fter you notify the card company of loss or theft of your card. So kee a list of your credit card numbers and notify card issuers immediately if your card is lost or stolen. The most you will have to pay for unauthorized charges is $50 on each card--even if someone runs up several hundred dollars worth of charges before you report a card missing.