I applied for a cash-out refinance of my home in California with a non-bank mortgage lender. I thought I knew the lending process, but not so sure after all. The lender had me sign docs, but an appraisal has not been performed, and underwriting is not completed, etc. But I had to sign the "Right to Cancel"? I thought I signed that after the credit process, and before actual funding, so I can have three days to rescind. But they are telling me in California it's a "Dry" state, and they can do that. Can someone please enlighten me...

Just my opinion, but if they are having your sign the Right of Recission, then your loan should take effect on the 4th business day - in other words, your old loan should get paid off and if you are getting cash back, you should get that too. The only thing I can think of is they are streamlining the process and getting all their supporting documents (appraisal, title, flood, etc) aftre the fact of disbursement, which if they are portfolioing the loan, I guess they could do.

You still have 3 business days to rescind after you close, whether they give you notice of right to rescind before or at closing.

The 3 day period begins at the LATEST of closing, notice of right of rescission, or receipt of all material disclosures.

I agree with you, it doesn't speed up the funding process as it is the 3 days does not start to run until the latest of notice provided, consummation, or dilivery of material discloures.

Original poster here... The notary had me sign and date everything. Everything includes, the Note, Deed of Trust/Security Instruments, Riders, Final 1003, all sorts of disclosures including REG Z and RoR. This was 10 days ago.

Your Right of Rescission begins on the LATTER of:
* Your receipt of of your Notice of Right to Cancel
* Your receipt of the MATERIAL disclosures (aka Reg Z disclosures)
* Consumation of the loan itself.

If you signed a "Right of Rescission" notice without signing the rest of the loan docs, it would be meaningless.

HOWEVER, if you are obtaining a "High Cost" loan, there are some additional disclosures that you are supposed to receive 3 days before you would get your actual loan docs and other Reg Z disclosures.

I have no idea what they mean by saying that California is a "dry state."

It sounds like the ROR was given correctly and your 3 days are over (you said 10 days ago). Why they would do the appraisal after the fact, and underwrite it after the fact is strange to me. Have you received your proceeds (cash out)?

Original Poster again...I guess I am confused as to why I would even sign documents (Note, DoT, etc) if my loan is still being processed and underwritten. I was not provided with any "Prior to" conditions either. I thoughts loan docs are generally "drawn" after underwriting approval, let alone signed.

I think we all have questions, but not a lot of answers. The people who can best answer your questions are the folks at the California Department of Financial Institutions (DFI). DFI is responsible for regulating many financial services organizations in the state. They have an "Ask DFI" e-mail address. I suggest you contact them at consumer@dfi.ca.gov.