We have a 5/1 loan (fixed for 5 years then 1 year adjustable) where the initial rate is the same as what the fully indexed rate would be (based on today's index.) As a result, LaserPro is producing a TIL that shows 359 payments at $XXX and one payment at $YYYY. Originations dept is concerned that LP is not showing the payment stream for the first 60 months and then the rest of the loan at a new payment level (even though the level is the same) and then the final payment.
Does the fact that the payments after the first adjustment (based on today's index + margin) are the same as the initial payments, obviate the need for disclosing the second payment stream? (Hope that is clear.)

If I'm reading right, your "teaser rate" is the same as your current index + margin rate? If this is the case, then I would expect Laser Pro to produce the TIL with the payment streams you describe (I'm not a LP expert but I don't think it would disclose 60 payments at $XXX and then another 299 payments at $XXX as a separate stream and 1 payment at $YYY). Since the TIL for an ARM assumes the rate will adjust to your current fully indexed rate after the initial rate period ends, there is essentially no rate change in your TIL scenario.

Yes.

Thanks Dude and Richard!

I think I have a similar situation. I am doing a review on a 5/1 ARM. The rate is not discounted and the floor is the rateat time of closing. When I run the TIL it discloses as 30 yr fixed. Does that sound right?

Thanks

If the rate would not adjust at the first adjustment date (normally only when a discount or premium is charged) under the contract and the current rate conditions as they exist at closing there would be no second (or third or fourth) payment stream on the final TIL.

Thank you very much. I had never come across this before. It just looked very strange