Which law allows borrowers to rescind a refinance within three business days of closing?

The Truth in Lending Act is the correct answer because it provides borrowers with specific rights, including the right to rescind, or cancel, certain types of loans within three business days of closing. This law was enacted to ensure that consumers are fully informed about the cost of borrowing, including the terms and conditions of the loan. The ability to rescind is particularly important in refinance situations, as it gives consumers the opportunity to reconsider their decision after gaining a deeper understanding of the financial implications.

In the context of refinancing, this law helps protect consumers from potential mistakes made in haste or due to high-pressure sales tactics by providing a cooling-off period. Recognizing this right helps borrowers make more informed decisions about whether to proceed with the loan or seek other options.

The other laws listed focus on different aspects of lending and consumer protection. For example, the Equal Credit Opportunity Act addresses discrimination in lending, the Real Estate Settlement Procedures Act pertains to the overall loan settlement process and disclosures about settlement services, and the Home Mortgage Disclosure Act is aimed at providing transparency in lending patterns to prevent discrimination. While all these laws serve important roles in protecting consumers, they do not specifically grant the right to rescind a refinance within three business days, a key provision of the Truth in Lending Act