We have a small number of loans on our books from an acquisition that are adjustable rate loans that are not tied to an index. The Note indicates the interest rate can be adjusted based on our discretion, but is the change is still subject to annual caps. We cannot automate the production of the ARM Adjustment Notices as our system requires an index in order to generate them.

Management has made the decision to not adjust the rates on these loans. We have been typing notices by hand, showing current and new rates and payments are the same. Our servicing area is questioning if we need to continue manually creating notices, since the rates and therefore the payments are not changing.

The way the regulation is written I tend to agree with them. Thoughts?

No new payment - no disclosures:

(2) Timing and content. Except as otherwise provided in paragraph (c)(2) of this section, the disclosures required by this paragraph (c) shall be provided to consumers at least 60, but no more than 120, days before the first payment at the adjusted level is due.