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#2054294 - 12/15/15 07:57 PM ARM Loan - APR on Closing Disclosure
Likes to Comply Offline
Diamond Poster
Joined: Nov 2008
Posts: 1,107
In the mountains
The index we use is the weekly average yield on United States Treasury securities adjusted to a constant maturity of one year. If we generate a CD this week and mail or deliver it, but the loan doesn't close until the end of next week, when generating the CD again in Encompass it will automatically refigure the APR using that day's index amount. So my question is, do we just rely on the original CD that was given the prior week if we made no changes to any fees or terms on the loan or do we give the borrower an updated CD that reflects the APR change due to the index adjustment?
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TRID - TILA/RESPA Integrated Disclosures Rule
#2059845 - 01/21/16 08:43 PM Re: ARM Loan - APR on Closing Disclosure Likes to Comply
S Ross Offline
Junior Member
Joined: Nov 2012
Posts: 38
We are having the same issue in Laser Pro, have you received any assistance with the question?

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#2059903 - 01/22/16 03:33 AM Re: ARM Loan - APR on Closing Disclosure Likes to Comply
rlcarey Online
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rlcarey
Joined: Jul 2001
Posts: 83,219
Galveston, TX
It depends on if you have a rate lock in place. You can use any rate within the look back period as specified in your note for the final CD. For example: If you have a 45 day look back period in your note, you can disclose your final CD based on any rate within 45 days of closing, You do not have to use the current index. If there is no rate lock, then you would have to base it on the current rate in effect at closing.

i. When creditors use an initial interest rate that is not calculated using the index or formula for later rate adjustments, the disclosures should reflect a composite annual percentage rate based on the initial rate for as long as it is charged and, for the remainder of the term, the rate that would have been applied using the index or formula at the time of consummation. The rate at consummation need not be used if a contract provides for a delay in the implementation of changes in an index value. For example, if the contract specifies that rate changes are based on the index value in effect 45 days before the change date, creditors may use any index value in effect during the 45 day period before consummation in calculating a composite annual percentage rate.
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