A borrower has gone to settlement for a cash out refinance on Tuesday. Their rescission period is over at midnight on Friday. According to the provisions specified under federal law, when does the loan fund?
Saturday. The count for the three day rescission period begins at midnight following settlement and ends at midnight on the third day. Once the rescission period is over, the loan must fund the next business day. According to Regulation Z, Saturday is considered a business day for the purposes of rescission, so technically, the loan would fund over the weekend. Federal holidays and Sundays are the only days considered “non-business.”