Lenders that refinance home equity loans by replacing the old mortgage with a new one for an increased amount should be concerned about a recent decision of the 3rd U.S. Circuit Court of Appeals holding that neither of the Federal Reserve Board's model rescission forms provides adequate disclosure of a borrower's rescission rights in certain refinancings.

The ruling implies that most lenders must change their rescission notices. said John L. Culhane, a senior associate in the law firm of Wolf, Block, Schoor & Solis-Cohen in Philadelphia.

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