Pub. 12 2024 Issue 1

TILA. Q: During my review of rate/payment change notices for adjustable-rate mortgages (ARM), I noticed on a loan originated in 2008 that a change notice was not generated. The rate is supposed to adjust every five years with a 45-day rate forecast. I recalculated the date that it should have generated a notice, and according to my calculation, the rate will not change. So, my question is if the rate does not change, are we still required to send the change notice? A: No. Notices are required only when the interest rate results in a corresponding adjustment to the payment amount. The required timing for such notices is based on when a change in payment related to a rate change becomes effective. Flood Insurance. Q: We occasionally take a mortgage on a property as an “abundance of caution.” Our procedures indicate that we must get a flood hazard determination on that property. Then, if needed, also provide a flood hazard notice and require flood insurance. I have been requested to get clarification that this is correct. Is there anything that speaks to an abundance of caution situations? I have been using the reasoning that the flood insurance regulation does not care why we put a mortgage on a property. If we do, then we must follow all the steps required. THANKING OUR SPONSOR, UNITED BANKERS’ BANK UBB.COM At United Bankers’ Bank, “First for Your Success” is more than just our tagline; it’s a promise and a guiding principle that establishes the success of each and every customer as our number one priority. UBB pioneered the bankers’ bank model and for more than 47 years we have placed the needs and success of our community bank customers first and above all else. You can count on UBB to be a dedicated ally for community banking today, tomorrow and into the future. Your success is our success, and at UBB, we are always First for Your Success. Community Banker 15

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