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#1216288 - 07/13/09 01:01 PM Which APOR table?
AuditorK Offline
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Joined: Feb 2003
Posts: 962
PA
We do 5 year balloon mortgages with a 15 year amortization. After the first 5 years, the borrower and lender may agree on a new renegotiated 5 year fixed rate, and so on.

My question is, which APOR table do I compare our rates to - the fixed or variable? I assume I compare to the 5 year term column, not the 15 year column?

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Lending Compliance
#1216299 - 07/13/09 01:24 PM Re: Which APOR table? AuditorK
Dan Persfull Offline
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Dan Persfull
Joined: Aug 2002
Posts: 47,517
Bloomington, IN
You very well could have a variable rate loan. It is dependent on whether you are unconditionally obligated to renew the balloon payment OR if you are obligated to renew it if the borrower meets certain conditions. If you are then you do have a variable rate loan. See the Commentary to 226.19(b)(5) and review your loan documents.

The comparison is based on the term of the loan. 5 year balloons have a 5 year term.
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The opinions expressed are mine and they are not to be taken as legal advice.

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#1216417 - 07/13/09 03:47 PM Re: Which APOR table? Dan Persfull
AuditorK Offline
Platinum Poster
Joined: Feb 2003
Posts: 962
PA
Our note specifically states that the lender is not obligated to renew after 5 years and does not list conditions that if the borrower meets, would obligate the bank to renew. It appears that we have a fixed rate 5 year loan and would be able to compare to that particular table of APORs.

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