Massachusetts Agencies



G.L.c. 240D, §10 governs the rescission of a mortgage transaction by a consumer.

Rescission is permitted where the mortgage is granted on property owned and used by the consumer as his principal dwelling. The right to rescind does not extend to purchase money mortgages.

The consumer has until midnight of the third business day after the transaction to rescind the transaction. The exercise of the right to rescind can be by mail, and is deemed given when deposited in the mail, so lack of receipt of the mailed rescission by the creditor by midnight of the third business day is not necessarily dispositive as to whether the right to rescind has been timely exercised.

The right to rescind can be waived or modified but, under the statute such waiver or modification must be for a "bona fide personal emergenc[y]." The statute permits the commissioner to "prescribe regulations authorizing the modification of any rights created under this section," and the applicable regulation provides:

The consumer may modify or waive the right to rescind if the consumer determines that the extension of credit is needed to meet a bona fide personal financial emergency. To modify or waive the right, the consumer shall give the creditor a dated written statement that describes the emergency, that specifically modifies or waives the right to rescind, and that bears the signatures of the consumers entitled to rescind. Printed forms for this purpose are prohibited.

Although there must be a "bona fide personal emergenc[y]" in order for the right to rescind to be waived, the regulation states that what constitutes such an emergency is "determine[d]" by the consumer.