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ARM notices

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  • #5951
    wp27
    Participant

    In the blog Jack wrote about the effective date for new ARM notices, he said “”servicers will not be required to provide the 1026.20(d) notice when such payment is due 209 or fewer days from the effective date. It appears the first 1026.20(d) notice for an existing account is required on or after August 8, 2014.” So, if we have a loan that was made on 8/5/2013, and the first payment at a new level is due 9/5/2014, would they be required to get an intial interest rate adjustment notice since the first payment at a new level is due after the January 10, 2014, effective date and the notice would need to go out on 2/8/2014? Or not, because the loan was made before the effective date? Or a loan made on 11/15/2013, with the first payment at a new level due 12/15/2014, the notice would need to go out on May 20, 2014 or not since this loan was made before the effective date? I guess I am confused if the August 8 deadline that Jack spoke of meant for the first notice to actually go out or for payment adjustments made after that date? Thanks for any help…

    #6018
    rcooper
    Keymaster

    This question seems familiar and based on the dates provided, I believe we may have answered it before, but a quick search of the forum didn’t turn up anything. But to answer the question, the point Jack was making in his blog article with the “August 8, 2014” date is that this date is 210 days from the effective date, meaning any initial payments due on or after August 8, 2014 would be subject to this disclosure as you would have time to deliver the notice within the 210-240 day required timeframe outline in 1026.20(d). So for initial payments on or after August 8, 2014 you need to comply with 1026.20(d).

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