My bank is looking into offering a variable rate mortgage product, which we have not done since my time here.

I am aware of the CHARM booklet requirement and the application disclosure required under 226.19(b).

From a compliance standpoint, are there any other aspects of the product I need to be concerned with?

ARM Program Disclosures are required each time you discuss a program with a customer. Be sure to familiarize everyone with payment streams for premium or discounted ARMs, so your lenders know and can recognize when a disclosure is incorrect. Especially when PMI is involved, the payment streams for ARMs can be complex. You might want to review the OCC's Win APR program to test the ARMs.

Shouldn't the program disclosures be part of our loan processing software? We use Arta Lending and I am having trouble finding them.

We have used outside vendors in the past, but now produce copy annually to update the prior year's version. We use 3/1 and 5/1 disclosures, so it's not too much work to update the forms. They then are loaded into our LOS for our Loan Officers to print for each applicant requesting ARM information.

Not necessarily. We too use ARTA and the early program disclosures for both ARM and HELOCs or modules of ARTA. You have to be subscribed to the modules in order to assess them. If you are not sure if you are subscribed or not open ARTA and click on help. It should give you a customer service number and your customer ID #. Call CS and see if you are subscribed.

Program disclosures are obvious requirements, take time to compose, & are a constant source of technical violations, but MoMan raises a more serious issue about payment schedules. Depending on how you index and price your products, you may fall into the special rules for transaction disclosures. Interpretation or calculation errors involving the payments schedules for transaction disclosures can be reimbursable and can do serious harm to your compliance exam rating. These rules are discussed in the OSC to Section 226.17(c)(1), #8 - 10. Study them and search for BOL discussions using terms like "discount", "premium", and "par", combined with "ARM". "Fully indexed rate" is another good search term.

The worst reimbursement case I've seen in 39 years experience with Reg. Z was caused by a simple calculation error for discount ARMs.

Thanks so much for all of the replies. I did find the ARM Program set-up within Arta, thanks Dan!