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)
Last edited by Jade'sFire; 07/16/15 03:09 PM.
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 § 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.
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