By David Thun on January 8, 2020
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Updated 7-27-22. 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 with 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 without a Notice of Right to Cancel form include “purchase” loans used to buy a house (aka purchase transactions), refinance loans with the same lender, loans from state agencies and loans for homes that are not a primary residence (vacation homes and income properties).
Does a Notice of Right to Cancel form require notarization?
No.
What are the Signing Agent's responsibilities with respect to the Notice of Right to Cancel form?
The Signing Agent must print out and provide two copies of the NRTC form for each borrower. The Signing Agent must print out an additional copy of the form for each borrower to sign at the loan signing appointment 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.