Updated Index for Discounted Rate on ARM Product

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Question:

We offer a discounted rate with some of our ARM products. We use the index at the time the rate was set to calculate the fully indexed rate throughout the entire loan and that is what is disclosed on the LE and CD. Under what circumstance would we locate an updated index from a the date of closing or within 45 days of closing and disclose a blended APR. Would this be a 2 time construction closing? We disclose based on once the rate/index is locked that is the rate/index we use when we close. Unless of course the loan is re-locked for any reason.

Answer:

This is a complex question it would take a dozen questions to figure out what you really mean is going on with the product. About the best we can do is refer you to:

Official Interpretation
17(c) Basis of Disclosures and Use of Estimates
Paragraph 17(c)(1)

See Comment 10