HUD Proposes Amendments To FHA ARM Regulations

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On May 8, HUD proposed a rule to amend the FHA’s single family adjustable rate mortgage (ARM) program regulations to align those regulations with the interest rate adjustment and notification periods required for ARMs under the CFPB’s new TILA mortgage servicing rules. The proposed rule would require that an interest rate adjustment resulting in a corresponding change to the mortgagor’s monthly payment for an ARM be based on the most recent index value available 45 days before the date of the rate adjustment. FHA’s current regulations provide for a 30-day lookback period. The proposed rule also would require that the mortgagee of an FHA-insured ARM comply with the disclosure and notification requirements of the CFPB’s TILA servicing rules, including at least a 60-day but no more than 120-day advance notice of an adjustment to a mortgagor’s monthly payment. FHA’s current regulations provide for notification at least 25 days in advance of an adjustment to a mortgagor’s monthly payment. Comments on the proposal are due by June 9, 2014.

 

Topics:  Adjustable-Rate Mortgage, CFPB, FHA, HUD, Mortgage Servicing Rules, Proposed Regulation, TILA

Published In: Consumer Protection Updates, Finance & Banking Updates, Residential Real Estate Updates

DISCLAIMER: Because of the generality of this update, the information provided herein may not be applicable in all situations and should not be acted upon without specific legal advice based on particular situations.

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