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MCUA Files Comment Letter on ARM Look-Back Periods

On Monday, June 9, the Missouri Credit Union Association (MCUA) filed a comment letter with the Department of Housing and Urban Development (HUD) supporting the agency’s proposal to align Federal Housing Administration (FHA) regulations with the requirements for notifying borrowers of Adjustable Rate Mortgages (ARMs) under the Truth in Lending Act and Regulation Z.

HUD is proposing to require FHA-approved lenders, in setting a new interest rate for an ARM loan, to use the current index figure that is the most recent one available, 45 days, rather than the current 30 days, before the date of an interest rate adjustment. This revision, if finalized, would enable lenders to meet the 60- to 120-day notification period prior to any adjustment to a borrower’s monthly payment, as required by the Consumer Financial Protection Bureau mortgage servicing rules. MCUA supports these proposed revisions, as this change will more properly align FHA’s requirements with those already prevalent in the industry.


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