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#2271184 - 06/03/22 03:54 PM Initial ARM Disclosure
JobSecurity Offline
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How do I determine which Adjustment Notice should be disclosed on my Early ARM Disclosure?

Paragraph 19(b)(2)(xi)
1. Adjustment notices. A creditor must disclose to the consumer the type of information that will be contained in subsequent notices of adjustments and when such notices will be provided. (See the commentary to § 1026.20(c) and (d) regarding notices of adjustments.) For example, the disclosure provided pursuant to § 1026.20(d) might state, “You will be notified at least 210, but no more than 240, days before the first payment at the adjusted level is due after the initial interest rate adjustment of the loan. This notice will contain information about the adjustment, including the interest rate, payment amount, and loan balance.” The disclosure provided pursuant to § 1026.20(c) might state, “You will be notified at least 60, but no more than 120, days before the first payment at the adjusted level is due after any interest rate adjustment resulting in a corresponding payment change. This notice will contain information about the adjustment, including the interest rate, payment amount, and loan balance.”

1026.20(c) shows exemptions for less than 1 year and if the first payment is due within 210 days. We are doing 5/1 ARMs so we would not be exempt from (c) or (d).

Common sense says us the 210 to 240 days, but I need to see that in writing so we don’t use the 60 to 120 days. I am sure it is there but I am not seeing it.

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Lending Compliance
#2271185 - 06/03/22 04:03 PM Re: Initial ARM Disclosure JobSecurity
rlcarey Online
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rlcarey
Joined: Jul 2001
Posts: 83,223
Galveston, TX
If both c and d are applicable, you provide them both.

You will be notified at least 210, but no more than 240, days before the first payment at the adjusted level is due after the initial interest rate adjustment of the loan. This notice will contain information about the adjustment, including the interest rate, payment amount, and loan balance.

You will be notified at least 60, but no more than 120, days before the first payment at the adjusted level is due after any interest rate adjustment resulting in a corresponding payment change. This notice will contain information about the adjustment, including the interest rate, payment amount, and loan balance.
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#2271188 - 06/03/22 04:26 PM Re: Initial ARM Disclosure JobSecurity
JobSecurity Offline
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Joined: Oct 2009
Posts: 604
Thank you Randy! I was hoping you would answer this one.

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