Executive Summary

· HUD is proposing to revise FHA regulations regarding single-family adjustable-rate mortgages (ARM) to align FHA interest rate notification regulations with the ARM adjustment notification requirements under the Truth in Lending Act (TILA) as implemented by CFPB’s 2013 mortgage servicing rule, Regulation Z.

· The first proposed change would establish a 45-day look-back period for FHA-insured ARM loans (the current look-back period is 30 days). This would require that an interest rate adjustment resulting in a corresponding change to the borrower’s monthly payment for the ARM be based on the most recent index value available 45 days before the date of the rate adjustment.

· The second proposed change would require that a mortgagee of an FHA-insured ARM loan comply with the disclosure and notification requirements in the CFPB’s 2013 mortgage servicing rule. This would include a requirement to provide at least a 60-day, but no more than 120-day, advance notice of an adjustment to a borrower’s monthly payment. (Currently, notification is required at least 25 days in advance of the change to a borrower’s monthly payment).

Comments are due to HUD on June 9, 2014. All comments may be filed directly with www.regulations.gov, identified by docket number FR-5744-P-01 and the title of this proposed rule. Comments may also be mailed or hand delivered to Regulations Division, Office of General Counsel, Department of Housing and Urban Development, 451 7th St, SW., Room 10276, Washington, D.C. 20410-0500. Please submit comments to CUNA by June 2, 2014.

For more information about this proposed rule, contact CUNA Deputy General Counsel Mary Dunn or Associate General Counsel Jared Ihrig.

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