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#1250423 - 09/15/09 07:15 PM Question on APR
QueenBB Offline
100 Club
Joined: Jan 2006
Posts: 190
TX
We are looking at advertising an ARM loan program. I have a starting rate of 5.75%. What amount do I use to figure an APR? Is that the same $10,000 that you use for the early ARM disclosures?

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Lending Compliance
#1250562 - 09/15/09 09:10 PM Re: Question on APR QueenBB
Reads Regs Offline
Diamond Poster
Joined: Nov 2004
Posts: 2,307
If your ad will run on or after 10/1/09, refer to the amended text of section 226.24 of Reg. Z and its corresponding official staff commentary. If your ad uses triggering terms like the rate and term, then you will have to give a repayment example. The new rule requires a more detailed example for variable rate loans. I would pick what your common loan amount is for that product and base my example on that.
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Opinions expressed are my own and not necessarily those of my employer. They are not legal advice.

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#1250597 - 09/15/09 09:44 PM Re: Question on APR Reads Regs
QueenBB Offline
100 Club
Joined: Jan 2006
Posts: 190
TX
I realize the upcoming advertising rule changes should be in the ads. In picking the most common loan amount, should I also disclose that "the APR listed is based on a loan of $xxxxx)?

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#1250839 - 09/16/09 02:05 PM Re: Question on APR QueenBB
Richard Insley Offline
10K Club
Richard Insley
Joined: Oct 2000
Posts: 10,179
Toano, VA
Disclosing the basis for estimates is rarely required, but always an excellent practice. If you spell it out up front, it's easier to deal with any customer who may complain about being mislead. Also, it's really handy for internal reviews. Your internal reviewer will save time (spelled "m.o.n.e.y") if s/he doesn't have to go on a treasure hunt for all the data necessary to reproduce and prove the advertising disclosure.
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