Adjustable Rate Mortgages (ARM)
This module fully automates the tasks associated with the servicing and reporting requirements of adjustable rate loans; including setting up and managing indexes, performing timely payment and rate change calculations, as well as printing all required borrower notices and reports.
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If you're servicing Adjustable Rate Mortgages (ARMs), you should be concerned about widespread overcharges caused by incorrect rate and payment adjustments. It's estimated that between 20% and 30% of ARM adjustments performed by servicers are incorrect.
The following list is just a brief description of some of the features available in this new module:
- Comprehensive, easy-to-use system to manage any type of ARM
- Unlimited rate and payment adjustments
- Supports ceiling, floor, initial and subsequent/periodic rate caps
- Ability to have separate rate caps for rate increases and/or decreases
- Unlimited number of indexes with lookback days support
- ARM Index Rates automatically updated via the Web
- Rounding factor with ability to round up, down or nearest
- Fully automated carryover accounting
- Payment caps
- Negative amortization cap with automated payment recast
- Payment recasting based on a schedule with stop date support
- Complete rate & payment changes history
- Prints borrower rate and payment adjustment notifications
- All notices are printed using Microsoft® Word and mail-merge
- Prints a complete calculation audit report with detail calculation worksheet
- Reports and notices can be reprinted at any time
- Handles payment adjustments for interest-only ARM
- And much, much more...
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Manage ARM Indexes.
Use the Manage ARM Indexes grid to view, edit and print index and rate information. It is designed to enable you to enter the latest rate information very quickly and with a minimum number of steps. The design methodology used for the grid is similar to the familiar Windows Explorer. The left pane of the grid contains a list of the indexes, while the right pane displays the rate history of the selected index.
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Download the Latest ARM Index Rate Values. Applied Business Software compiles 5-years of historical values for the most widely used indexes. These historical index values are regularly updated and offered free of charge to our users for download from within The Mortgage Office™.
There are many possible ARM indexes. Each one has distinct market characteristics and fluctuates differently. At the time of this writing, we offer for download the following commonly used indexes:
- WSJ Prime Rate
- 11th District Cost of Funds Index (COFI)
- FNMA 1-Month LIBOR (1, 3 & 6-Month, 1-Year & 12-Month Avg)
- CMT 3-Month (Daily, Weekly & Monthly)
- CMT 6-Month (Daily, Weekly & Monthly)
- CMT 1-Year (Daily, Weekly & Monthly)
- CMT 2-Year (Daily, Weekly & Monthly)
- CMT 3-Year (Daily, Weekly & Monthly)
- CMT 5-Year (Daily, Weekly & Monthly)
- CMT 7-Year (Daily, Weekly & Monthly)
- CMT 10-Year (Daily, Weekly & Monthly)
- CMT 20-Year (Daily, Weekly & Monthly)
- Secondary Market CD 1-Month (Daily, Weekly & Monthly)
- Secondary Market CD 3-Month (Daily, Weekly & Monthly)
- Secondary Market CD 6-Month (Daily, Weekly & Monthly)
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Scheduled Rate & Payment Changes. Use the Scheduled Rate & Payment Changes explorer to edit, cancel or delete ARM modifications as well as to reprint borrower adjustment notices and related reports. A complete historical record of all rate and payment adjustments is available to you at any time.
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Reports & Borrower Adjustment Notices. Federal regulations dictate that servicers of Adjustable Rate Mortgages (ARMs) are required to provide borrowers with timely adjustment notices at least once each year in which an interest rate adjustment is implemented without an accompanying payment change, and at least 25, but not more than 120, calendar days prior to the due-date of a payment at the new level.
To comply with regulations, The Mortgage Office™ automatically produces the following three types of notices:
- Notice of Rate Adjustment
- Notice of Payment Adjustment
- Notice of Rate and Payment Adjustment
In addition to the borrower notices, several reports are also available to help you manage ARM loans more efficiently. Reports such as Loans With Pending Adjustments, Overdue Calculations, Negative Amortization Cap Exceeded, and others can be generated at any time. |
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