Initial LE disclosed 7/6 ARM- Initial CD disclosed 7/5 ARM in error. Revised CD issued with corrected product. APR within tolerance. Is a new waiting period required due to the error on the initial CD noting a 7/5 ARM? Two separate opinions here- 1 says yes, new waiting period, because product changed- the other says no, because only the first adjustment period ( 7 years) is considered in the product tolerance, not the subsequent adjustments (5 months vs 6 months).

19(f)(2)(ii) Changes before consummation requiring a new waiting period.

(B) The loan product is changed, causing the information disclosed under § 1026.38(a)(5)(iii) to become inaccurate.

Ask them how the information disclosed under 1026.38(a)(5)(iii) was not inaccurate?

This is what they are citing for concern with the the initial adjustment period. I don't think that is what this is saying-

If the loan product disclosed pursuant to § 1026.37(a)(10) does not include any of the features described in § 1026.37(a)(10)(ii), only the product type and introductory and first adjustment periods, if applicable, are disclosed. For example:

i. Adjustable rate. When disclosing an adjustable rate product, the disclosure of the loan product must be preceded by the length of the introductory period and the frequency of the first adjustment period thereafter. Thus, for example, if the loan product is an adjustable rate with an introductory rate that is fixed for the first five years of the loan term and then adjusts every three years starting in year six, the disclosure required by § 1026.37(a)(10) is “5/3 Adjustable Rate.” If the first adjustment period is not the period for all adjustments under the terms of the legal obligation, the creditor should still disclose the initial adjustment period and should not disclose other adjustment periods. For example, if the loan product is an adjustable rate with an introductory rate that is fixed for the first five years of the loan term and then adjusts every three years starting in year six, and then annually starting in year fifteen, the disclosure required by § 1026.37(a)(10) would still be “5/3 Adjustable Rate.”

Initial CD disclosed as a 7/5 mo. Adjustable Rate and I assume that the correct description was 7/6 mo. Adjustable Rate.

How can they possibly say that is the same product? If the descriptions do not match, then it is a different product. I have no idea how you argue otherwise.

Yes, you assume correctly. Thank you!