I recently informed by a consultant that with a Reg Z ARM loan, the payment must change at the rate review date regardless of whether the rate has changed. Does anyone know anything about this?

I know nothing about that. If the customer has paid their previous payments on time and for the amount scheduled, then the amortization schedule for the remainder of the loan will remain exactly the same if the interest rate does not change.

Your consultant needs to explain themselves.

Yeah some of the payments have been 6-7 days past the due date which would make sense with simple interest, but I was more curious about the Reg Z implication. I have never heard of this.

You should go back to them and ask them to provide the support for their position.

1026.20(c) is only triggered " in connection with the adjustment of interest rates pursuant to the loan contract". No interest rate change = no notice or re-amortization of the existing loan.


1026.20(c) Rate adjustments with a corresponding change in payment. The creditor, assignee, or servicer of an adjustable-rate mortgage shall provide consumers with disclosures, as described in this paragraph (c), in connection with the adjustment of interest rates pursuant to the loan contract that results in a corresponding adjustment to the payment.