Reply To: ARM Rate Change Notices


Your specific situation isn’t addressed in the regulation or commentary. 1026.20(d) does state:
Initial rate adjustment. The creditor, assignee, or servicer of an adjustable-rate mortgage shall provide consumers with disclosures, as described in this paragraph (d), in connection with the initial interest rate adjustment pursuant to the loan contract.

It seems to me your initial rate adjustment per your contract has already passed before the effective date and as a result you wouldn’t need to send the 1026.20(d) notice.

Response by jholzknecht:
Let me add to Robin’s answer. The initial rate adjustment is an estimate. The estimate is sent 210 to 240 days prior to the first scheduled payment at a new level. At the time you prepare the initial notice you have no idea if the rate will actually change or not, but you provide the estimate anyway.

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