The Department of Housing and Urban Development (HUD) is proposing changes to how Federal Housing Administration-insured adjustable-rate mortgages are adjusted. The changes are intended to align FHA’s lender requirements with the CFPB’s servicing rule. The proposal increases the “look-back” period (the period of time between an ARM index calculation and the date the rate adjusts) from the current 30-day look-back period to a 45-day look-back period. The proposed rule also provides a 60-120 day notice period prior to ARM adjustments, up from the current 25 day period. Comments are due June 7, 2014 and the changes will take effect in FHA-insured ARMs originated after January 10, 2015.
Link to Proposed Rule: https://s3.amazonaws.com/public-inspection.federalregister.gov/2014-10572.pdf