We just started offering an ARM product. Can anyone tell me how to input a 5/5 ARM (30 year amortization) into APRWIN correctly? (Our compliance consultant is a total FAIL on this!) Any help would be appreciated!

You have to enter your payments based on the amortization for the 5 year fixed period and then for the adjustment period. For example, we offer 5/1 ARM products but because our intial rate is higher than the index and margin, the payments do not usually change for the initial assessment and show a payment of $xxx.xx for 359 months and a payment of $xxx.xx for the final payment.

The first step is to ignore the payment information that Section 1026.18(s) requires you to disclose. This is not the payment schedule. The APR, FC, payment schedule, and TOP are all based on the payment schedule that Section 1026.18(g) would require you to calculate and disclose.

Your loan documentation system should generate an 18(g) payment schedule in order to comply with the record retention requirements of Section 1026.25. Assuming an 18(g) schedule is somewhere in your records, you simply confirm its accuracy. Official Interpretations 8 and 10 under Section 1026.17(c)(1) tell you how to do this.

After you have verified the 18(g) payment streams, load them into APRWIN and you will confirm a properly calculated APR.

Thanks very much for this answer. It's extremely helpful.