In light of the new regs regarding HPMLs and balloon payments, may we do an ARM that is adjustable every three years, but balloon it in seven years? We have been doing three or five year balloons on our in house loans prior to the recent change, but we really don't want to be tied to any index longer than seven years.
We currently have a first money purchase mortgage that matured in September, fixed rate, interest payments only. Now we are going to renew the note and extend for another year. What will change on the note will be P and I payments with amortization of twenty-five years, maturing in one year, no new money, rate stays the same. Is this loan now considered a new loan and what if any new disclosures do I need?
Our bank currently offers ARM loans where the rate adjusts quarterly. I'm concerned with the new Reg Z high-priced mortgage loan requirements, because the shortest term to first rate adjustment on the APOR table is one year. Will we be prohibited from making rate adjustments more often than annually?
We are working on the Reg. Z changes that came out Oct. 1, in relation to a higher price mortgage loan (HPML). We offer one, three, or five year ARM loans which meet the test for a HPML. All three of our ARM types originate at an index + margin (fully indexed rate) and are subject to an adjustment either at one, three or five years based on whatever the index is at that time plus the same margin the loan originated with. We assumed that we would have to calculate the repayment ability based on a worse case payment adjustment that could happen during the first seven years; however, I don't see an example for doing this in 226.34(a)(4)(iii)b. Do you believe that we are permitted to calculate the repayment ability based on the originating payment amount, because our rate is fully indexed at origination and subsequent adjustments are based on the current index rate at that time plus the same margin used at origination?
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Is there a blanket disclosure that can be given describing the product/index used, but that we can still use if we change the margin at any time and not have to redo our Early Disclosure?
If the loan product is an ARM, but the TIL reflects 359 of the same payments, hence no adjustment schedule, is this a violation? It worked out somehow that the floor rate with the index is so low the system would not calculate any adjustments.
On an ARM disclosure, if the initial rate is more than the index plus margin, but is equal to the floor, would a premium disclosure need to be made?
On a three year mortgage with a balloon are the RESPA disclosures of the Good Faith and Mortgage Servicing Disclosure required? On this loan the mortgage is not satisfied, a new note is done with an amendment. I think it is more like an extension not a refinance.
I was told that we do not need the table on the ARM disclosure. Is this correct?