Notary Signing Agent (Loan Signing) Practice Test
Right of rescission: practice questions
Our Notary signing agent bank has 46 questions on this topic. Here are 5 of them with answers; the full mock exam draws from every topic, like the real one.
Question 1
The 'rescission' rule in Regulation Z is in which section for closed-end loans?
- 12 CFR 1024.14
- 12 CFR 1002.7
- 12 CFR 1026.23
- 16 CFR 681.1
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C. 12 CFR 1026.23 — 1026.23 covers closed-end credit; 1026.15 covers open-end (HELOC) plans.
Question 2
After rescission, how does the consumer return loan money the creditor had already delivered?
- After the creditor acts, at the creditor's place of business
- Immediately, before the creditor releases the lien
- By paying it to the signing agent
- In 12 equal monthly installments, starting the month after the rescission
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A. After the creditor acts, at the creditor's place of business — 1026.23(d)(3): the consumer may keep money or property until the creditor has done its part; then money is tendered at the creditor's designated place of business.
Question 3
How does a consumer exercise the right to rescind?
- By calling the signing agent's phone before midnight of the third day
- By not cashing the loan proceeds check
- By telling the loan officer in person
- By notifying the creditor in writing, for example by mail
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D. By notifying the creditor in writing, for example by mail — 1026.23(a)(2): the consumer must notify the creditor of the rescission by mail, telegram or other means of written communication.
Question 4
During the rescission period, what can the creditor do with the loan funds (absent a valid waiver)?
- Disburse the funds to pay off the old loan right away
- Disburse half the funds to the borrower
- Disburse all funds once the deed of trust is recorded
- Hold them in escrow only, with no disbursement
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D. Hold them in escrow only, with no disbursement — 1026.23(c): unless the right is waived, no money may be disbursed other than in escrow, no services performed and no materials delivered until the period expires and the creditor is reasonably satisfied the consumer has not rescinded.
Question 5
When may a borrower waive the right to rescind?
- When the signing agent witnesses the borrower's oral waiver and notes it in the journal
- Only for a bona fide personal financial emergency, in a signed, dated statement
- When the lender includes a waiver form in the closing package
- When the signing agent witnesses an oral waiver
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B. Only for a bona fide personal financial emergency, in a signed, dated statement — 1026.23(e): waiver requires a bona fide personal financial emergency and a dated written statement describing it, signed by all consumers entitled to rescind. Printed forms are prohibited.