It's Monday, and it's been a difficult morning already - we are only 2.5 hours into the day.

We are trying to determine the feasibility of making both commercial and consumer (closed-end) mortgage loans tied to the LIBOR and Prime rates. One of the concerns we have is a notice of rate change. Are we required to provide a notice, especially to consumers, on a regular basis every time that the rate changes? If so, is there a minimum required period? (On our ARM programs, we send notices about 45 days prior to the change.)

We tie some commercial and consumer to LIBOR.
Instead of having the loans fully floating, we limit the rate change in the contract to monthly (commercial).
We just started to tie consumer mortgages to LIBOR - I can check tomorrow to see how often the rate changes on these but I know we do limit it because of the notifications that you have to send to consumers since ours fall under the ARM rules.

If the loan is subject to 226.19(b), then the loan will be subject to the subsequent disclosure requirements found in 226.20(c).

This requirement makes it extremely difficult to have fully floating consumer mortgage loans.

There should be no issue with making your commercial mortgages fully floating, presuming your system can accommodate the daily changes and your state law permits them.

Thank you, I thought we had to treat like our ARM product, I just had to be sure.