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#2006602 - 04/07/15 05:06 PM Adjustable Payment Table
Midwest123 Offline
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Joined: Mar 2012
Posts: 120
We offer ARM loans for one of our in-house mortgage products. I am reviewing the CFPB "Guide to the Loan Estimate and Closing Disclosure forms" again and had a question. So on pg. 1 of the LE we have to state whether the monthly principal and interest payment can change and if it can we are required to disclose and reference the "Adjustable Payment Table" and other required items. When looking at when we are required to have the "Adjustable Payment Table" the guide states that it is disclosed when the periodic principal and interest payment may change after consummation, but NOT because of a change to the interest rate.

So for our ARM loans, the payment amount would change because of the interest rate and therefore it seems we do not need to have the "Adjustable Payment Table" on our LE. However, when you go back to pg. 1 are we then going to state that "No" the monthly principal and interest will not increase after closing? Or would we still say "Yes" but not disclosure or reference the "Adjustable Payment Table" even though it states it is required in the guide?

I know we will have the AIR table I'm just concerned about the AP table. Thanks in advance for your help and time!

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#2006604 - 04/07/15 05:16 PM Re: Adjustable Payment Table Midwest123
Jerod Moyer Offline
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Jerod Moyer
Joined: Oct 2005
Posts: 667
Sioux Falls, SD
The adjustable payment table is only required when the payment makeup changes. For example, a loan with interest only payments for one year followed by 5 years of P&I payments would trigger the AP table. An ARM loan with a P&I payment makeup for the entire term of the loan would not trigger the AP table.
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#2006611 - 04/07/15 05:29 PM Re: Adjustable Payment Table Midwest123
Midwest123 Offline
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So then on page 1 of the LE on the "Loan Terms" section are we going to state that "No" the monthly principal and interest will not change? Or will we state "Yes" but just leave out the part about referencing the AP table?

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#2006616 - 04/07/15 05:43 PM Re: Adjustable Payment Table Midwest123
Jerod Moyer Offline
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Jerod Moyer
Joined: Oct 2005
Posts: 667
Sioux Falls, SD
Yes, in Loan terms you’ll state that P&I can change and give the related info. No, you will not refer them to the AP table because it is not triggered.
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#2006617 - 04/07/15 05:44 PM Re: Adjustable Payment Table Midwest123
Midwest123 Offline
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Joined: Mar 2012
Posts: 120
Wonderful! Thank you so much for your help and time!

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#2048874 - 11/09/15 09:49 PM Re: Adjustable Payment Table Jerod Moyer
tportell Offline
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Joined: Jul 2015
Posts: 2
If the title company is sending out our Closing Disclosure and they put an AP table on a 3/1 ARM would it be wrong for over disclosing?

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#2048895 - 11/09/15 11:19 PM Re: Adjustable Payment Table Midwest123
rlcarey Online
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rlcarey
Joined: Jul 2001
Posts: 83,219
Galveston, TX
It is not an over-disclosure - it is a violation:

3. When table is not permitted to be disclosed. Like the disclosure required by § 1026.37(i), the disclosure required by § 1026.38(m) is required only if the periodic principal and interest payment may change after consummation based on a loan term other than on an adjustment to the interest rate or if the transaction is a seasonal payment product as described under § 1026.37(a)(10)(ii)(E). If the transaction does not contain these terms, this table is not permitted on the Closing Disclosure.
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