Common Pitfalls of ARM Disclosures

What?
Since December 29, 1987 banks have been required to develop and deliver Adjustable Rate Mortgage (ARM) program disclosures for each different ARM program offered. The disclosures must be updated at least annually. Notices must be sent in response to rate changes. Many financial institutions have automated the ARM disclosure process, but violations still occur.

While many financial institutions have offered ARM products for decades, others only recently migrated from balloon mortgages to ARM products. Whether new to the ARM game or an old veteran this review of common problems with ARM loans will help keep your institution in compliance.

Many of the problems we see in this area result from mergers, acquisitions and system changes. In mergers or acquisitions loans originated by another lender are added to existing systems. Often the contract terms on the acquired loans are slightly different from the contract terms used by the acquiring lender. The systems must be able to handle the differences.

Why?
This two-hour program explains how to avoid problems when developing, maintaining and auditing ARM disclosures. The program explains the rules, reviews typical problems that occur, and provides steps to assure ongoing compliance.

Participants receive a detailed manual that serves as a handbook long after the program is completed.

Covered Topics

  • Failure to identify a transaction as an ARM loan;
  • Failure to deliver disclosures:
    • Within the required timeframes; and
    • With the required content;
  • Failure to periodically updating the disclosures; and
  • Failure to provide proper and timely rate adjustment disclosures.

Who Should Attend?

The program is designed for all mortgage lenders, compliance officers, auditors and others with responsibilities for assuring compliance with applicable laws and regulations in the mortgage loan department.