Our vendor generates the Reg Z ARM notices for interest rate adjustments with a corresponding change in payment even when there is no change in the rate.
The language in the notice is changed to state that the interest rate stayed the same, and that the interest rate and mortgage payment stay the same.
However, in the schedule, the monthly payment may actually be different because it includes the escrow payment amount, as well as principal and interest.
The escrow analysis is done at the same time, and the annual escrow statement is mailed with the ARM notice.
In my opinion, the interest rate change notice should not be generated if there is no change in the interest rate.
Is it a violation of the regulation to send the notice when there is no change in the interest rate? Also, should the escrow payment amount be included in the payment amount on the form? These are not interest only or negative amortizing loans. 1026.20(c)

I agree with you that I think the purpose of the notice is to alert consumers to rate/payment changes tied to their index, not escrow changes.

With that said, I don't see much risk in over-providing the disclosure so long as it is accurate and not confusing to the consumer.

I think Escrow should be part of what makes up the payment amount given that it would be listed separately for interest-only or neg. am loans based on the CFPB samples.