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#522407 - 03/27/06 02:08 PM Payment stream error
Bank Angler Offline
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Bank Angler
Joined: Apr 2004
Posts: 461
Just a short drive from Lake E...
We found a few 5/1 armsloans where the Note and Mortgage stated that the rate would change in the 60th month (instead of the 59th month), with the payment changing the next month. The final TIL for these loans has the first payment stream at 60 months. I did some searches on BOL and the concensus is that the Note and Mortgage are the legal documents, so the bank made an error in the final disclosure on the TIL. I recalculated 50% of the loans with 61 payments in the first payment stream, and the APR is overdisclosed from .003 - .006. The total payment amount is overdisclosed from $7.60 - $38.72. If we book the loans on our system with 61 payments in the first payment stream, do we need to contact the customer and send them a new TIL? Do we need to do the Note and mortgage over?
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#522408 - 03/27/06 07:27 PM Re: Payment stream error
Bank Angler Offline
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Bank Angler
Joined: Apr 2004
Posts: 461
Just a short drive from Lake E...
Anyone?
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#522409 - 03/28/06 12:47 AM Re: Payment stream error
rlcarey Offline
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rlcarey
Joined: Jul 2001
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Galveston, TX
No - the TIL disclosures appear to be within tolerance. You need to abide by your legal document (note) for collection purposes.
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#522410 - 03/28/06 01:34 PM Re: Payment stream error
Dan Persfull Offline
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Dan Persfull
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Posts: 46,832
Bloomington, IN
I'm confused, on a 5/1 shouldn't the rate change in the 60th month affecting the 61st payment?
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#522411 - 03/28/06 04:15 PM Re: Payment stream error
Bank Angler Offline
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Bank Angler
Joined: Apr 2004
Posts: 461
Just a short drive from Lake E...
I think I thought what I meant to think, but didn't say what I thought I thought I meant. Make sense? Too much on the desk today. Dan, you are completely correct, but to correct the TIL to the note, we have to put 61 payments in the first payment stream instead of 60.

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#522412 - 03/28/06 05:24 PM Re: Payment stream error
Dan Persfull Offline
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Dan Persfull
Joined: Aug 2002
Posts: 46,832
Bloomington, IN
If you are within tolerance then I agree with Randy's statement. But I guess I'm still confused about your disclosures.

On a 5/1 you would show an initial payment stream of 60 payments at the fully indexed rate. There would be no other payment stream unless you had a discount or premium rate. Your note would then show the rate changing on X and the payment changing on X (which would be the 61st payment).
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