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#414175 - 08/25/05 08:58 PM TIL with incorrect payment stream
Anonymous
Unregistered

We have several 5/1 ARM loans that have been disclosed incorrectly. The TIL shows a payment stream of 359 payments at one amount and a final payment. The TIL should show 60 payments, then 299 payments to reflect the rate increase and a final payment. The difference in the correct APR, FC and total of payments and what was disclosed is substantial. The correct total of payments on one particular loan is approximately $20,000 more than what was disclosed. How can we correct this? What are our options? Any advice will be appreciated.

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Lending Compliance
#414176 - 08/25/05 09:07 PM Re: TIL with incorrect payment stream
IlliniGrad Offline
Member
Joined: Mar 2005
Posts: 61
Midwest
Are your current 5/1 ARMs priced at an premium or discount? It appears the TILs are being generated assuming the initial rate = the fully indexed rate (i.e. no discount or premium).

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#414177 - 08/25/05 10:07 PM Re: TIL with incorrect payment stream
GreatBlue Offline
Diamond Poster
GreatBlue
Joined: Feb 2003
Posts: 2,362
Colorado
Take a look at the Interagency Policy Statement on Restitution. The Q&A has a question that deals with your specific situation, that is, not adjusting the initial rate. Here's one source of the Policy Statement, go to page 88 of the document (not the pdf) and read all the way through the answer to question 24.

This calculation is complicated and if you're talking about a number of loans, it would probably be worth your while to get someone like Richard Insley to help you with them.
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#414178 - 08/26/05 02:09 PM Re: TIL with incorrect payment stream
Anonymous
Unregistered

Thank you IlliniGrad and Blue.

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