I found the following 2 comments in other threads:

1) On ARMs, if we raise the rate upon cancellation of automatic payments, we are going to have to meet the ARM rate change notice provisions before we can raise the rate and we have to address it in the early ARM disclosure as a separate variable rate feature.

2) The initial notice is generated 210 to 240 days prior to the first payment at the adjusted rate. The subsequent notice(s) is/are provided 60-120 days prior to the first payment at the next adjusted rate.

Does this mean on a 10/1 ARM (for example), if the borrower terminates auto debit payments in year #6, we have to send the rate change notice 210 days before we can actually increase the rate on the loan? (Our Auto Debit Authorization form that is signed states that we will increase the rate "immediately" upon termination.)

Thank you!

That is the issue with these sorts of rate reductions. They are really idiotic on mortgage loans anyway. It is one thing to give up a few bucks on a car loan to get them to use automatic payments. On mortgage loans, it could be costing 5 figures over the course of the loan.

Thank you!