A borrower has until midnight of which business day to rescind a loan on a primary residence?

The borrower has the right to rescind a loan on a primary residence until midnight of the third business day following the loan closing. This is a provision under the Truth in Lending Act (TILA), which gives borrowers a cooling-off period to reconsider their loan agreement. The 3-day period allows borrowers to review the terms and conditions of the loan, ensuring they are fully informed about their decision.

This right of rescission is important because it protects consumers from hasty decisions and gives them time to evaluate whether the loan terms are in their best interest. The count begins the day after the closing and includes all business days, which are defined as days the lender is open for business. This consideration of business days is essential, as it excludes weekends and federal holidays, which can affect the exact timeline.

In contrast, the other options—whether it be the first, second, or fourth business day—do not accurately reflect the legal framework established under TILA. Understanding the correct duration for the right of rescission is crucial for both borrowers and loan officers to ensure compliance and protect consumer rights.