A loan modification agreement must include a provision allowing the borrower the right to cancel within how many days after the date of the agreement?

• A. Five business days
• B. Three business days
• C. Ten business days
• D. One business day

Answer: (B)

Borrowers have a brief window to reconsider a mortgage-related agreement that is secured by their home. For a loan modification, the contract must provide a right to cancel within three business days after the date of the modification agreement. This mirrors the Truth in Lending Act’s three-day rescission rule for dwelling-secured transactions, giving borrowers time to review terms and cancel without penalty if they change their mind. The countdown starts on the signing date and uses business days only; weekends and holidays don’t count, and if the period ends on a non-business day, it extends to the next business day. So the correct window is three business days. Longer windows would provide more time than required and shorter ones would not align with the standard protection.