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#2027474 - 07/16/15 03:08 PM Rate Adj Notices for Mods with Step Rates
Jade'sFire Offline
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Jade'sFire
Joined: Apr 2012
Posts: 369
Yaven IV
I would like to get a second opinion on my interpretation of the 1026.20 notice. I had initially thought that the rate adjustment notice would apply for our loan modifications that have a step rate adjustment. (HAMP step rate modifications)

But then I read the commentary:

2. Non-adjustable-rate mortgages. The following transactions, if structured as fixed-rate and not as adjustable-rate mortgages based on an index or formula, are not subject to ยง 1026.20(d):

i.. Shared-equity or shared-appreciation mortgages;

ii. Price-level adjusted or other indexed mortgages that have a fixed rate of interest but provide for periodic adjustments to payments and the loan balance to reflect changes in an index measuring prices or inflation;

iii. Graduated-payment mortgages or step-rate transactions;

iv. Renewable balloon-payment instruments; and [i][/i]

v. Preferred-rate loans

When I read this it looks like TILA does not define a step rate as an ARM so we would not need to follow the 26.20 rules.

Thanks for any second opinions, I just need to gain confidence that I am understanding this correctly.
Last edited by Jade'sFire; 07/16/15 03:09 PM.
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#2027478 - 07/16/15 03:10 PM Re: Rate Adj Notices for Mods with Step Rates Jade'sFire
rlcarey Offline
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rlcarey
Joined: Jul 2001
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Galveston, TX
You are correct.
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#2027511 - 07/16/15 03:58 PM Re: Rate Adj Notices for Mods with Step Rates Jade'sFire
Jade'sFire Offline
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Jade'sFire
Joined: Apr 2012
Posts: 369
Yaven IV
As always, Thanks for your input!!
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