11/01/2010
At this time, we are trying to avoid HPMLs by keeping our rates within the tolerance threshold. I am assuming that when it comes time for a rate to adjust, such as in the case of an ARM loan, we need to make sure the rate continues to fall within the HPML limits based on the rates at the time of the adjustment. Is this correct?
11/01/2010
I have a borrower who wants to change his loan from a thirty year fixed to a 1/1 ARM. Does this severe modification of the note require the loan to be treated as a refinance, thus requiring new disclosures (as the loan is going from fixed to adjustable)? No new money will be advanced, but what if we extend the term? Any resource on the subject you can point me towards would be appreciated.
10/25/2010
Concerning HPMLs, when using the APOR chart provided by the FFIEC, the "term" indicates the number of years until maturity of the note, not the number of years for which the loan is amoratized, as in a twenty year amortization with a five year call. Am I correct with this statement?
09/20/2010
For a construction loan with construction phase terms of 6.19% for eight months interest only, with balloon payment at maturity with a final take out of a 3/3 thirty year ARM, what should be on the initial GFE, construction HUD-1, and at take out closing? Should these now be treated as two separate and distinct loans to insure tranparency, or can the GFE include the construction terms and the take out terms that will occur eight monthes later?
09/13/2010
We have a customer who took a 3/3 ARM four years ago. It adjusted at the three year mark as normal, but then adjusted one year later (last month). When the customer contacted us, we realized that it had been mis-entered in our system as a 3/1. The customer has benefited from a lower rate at this point (first new payment is currently due), but we are not sure of the implications from correcting this. My thoughts are to do one of three things: 1) Allow this payment to be made at the lower rate, but change the product back to the 3/3 at the current (higher) rate for the remainder of the term. 2) Offer to keep the lower rate and do a modification to a 3/1 if the customer accepts. 3) Change the product back to the 3/3, but keep the lower rate for the remainder of the period (2 years) Any thoughts from a compliance or legal standpoint?
07/12/2010
What information needs to be on the Rate Change Notices for an adjustable rate mortgage loan?
05/03/2010
When you have an ARM loan that is being escrowed, can you avoid sending two notices of payment increase/decrease, due to the interest rate and escrow requirement change? We would like to do our escrow analysis and rate adjustment notification at the same time to avoid customer confusion.
03/15/2010
An audit said our 5/1 ARM TIL had a payment stream for a 30 year fixed. It disclosed: 359 payments @x and 1@y. I tend to agree. Our 5/1 arm is fixed for 5, adjusts annually thereafter withh a 2% annual cap and a 10% lifetime cap; it also has a floor rate. Our TIL vendor claims that because the index plus margin is so low, (it is below the floor rate and may even remain below the floor rate for the first ARM adjustment even when factoring the 2% annual cap), the TIL is based on the floor rate. I'm no expert on calculating payment streams, but I don't buy this argument. Any advice on what the proper payment stream should look like?
01/25/2010
On a secondary residence, do you have to give an ARM Disclosure if the rate is adjustable?
01/25/2010
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.