The HUD is proposing changes to how FHA-insured ARMs are adjusted. The changes are intended to align FHA’s lender requirements with the CFPB’s servicing rule.
The proposal requires a 45-day “look-back” period — that is, the gap between an ARM index calculation and the date the rate adjusts — up from the current 30-day look-back. It also provides for a 60-120 day notice period prior to ARM adjustments, up from the 25 days FHA currently requires.
The changes will take effect for FHA-insured ARMs originated after Jan. 10, 2015. Comments are due June 7.
Read the proposed rule.