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#1983426 - 12/16/14 07:05 PM 45 Day Language in Secondary Market Note
Rdy2Retire Offline
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Joined: Dec 2004
Posts: 117
GA Mountains
Our secondary market notes have language that reads under “The Index” section, “Beginning with the first Change Date, my interest rate will be based on an Index. The “Index” is the one-year London Interbank Offered Rate (“LIBOR”) which is the average of interbank offered rates for one-year U.S. dollar-denominated deposits in the London market, as published in The Wall Street Journal. The most recent Index figure available as of the date 45 days before each Change Date is called the “Current Index”.

Doesn’t the 45 days need to be changed to 60 days before 1/10/15?

Or because the payment doesn’t actually change until a month after the interest rate changes, is the 45 day language okay? I’m just having a hard time completely understanding the requirement. Thank you.

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#1984780 - 12/23/14 01:41 PM Re: 45 Day Language in Secondary Market Note Rdy2Retire
Carolina Blue Offline
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Carolina Blue
Joined: Jul 2005
Posts: 960
Lost in a regulatory fog
There's several threads about this question in this forum, but sounds like you got it.

The rate change notice is required 60-120 days prior to the corresponding PAYMENT due date. So when you set your rate 45 days back (look back period), then you have 75 days (45 day look back + 30 day payment due) to notify them of the new rate and payment.

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#1984782 - 12/23/14 01:51 PM Re: 45 Day Language in Secondary Market Note Carolina Blue
Carolina Blue Offline
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Carolina Blue
Joined: Jul 2005
Posts: 960
Lost in a regulatory fog
Actually, to clarify above...You have 15 days to notify the borrower. The rate change is 75 days prior to the payment due date giving you 15 days to meet the 60 day notice requirement.

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