VA finalizes ARM rule to align with TILA
WASHINGTON (8/13/15)--The U.S. Department of Veterans Affairs (VA) has amended its regulations governing adjustable-rate mortgages (ARMs) made through its Home Loan Guaranty program.
The final rule aligns the VA’s disclosure and interest rate adjustment requirements with the implementing requirements of the Truth in Lending Act (TILA).
According to the VA, the rulemaking will ensure the department remains consistent with other applicable consumer finance and housing regulations governing ARMs.
The rule requires:
That the requirements for disclosures and notifications that must be provided to borrowers prior to an interest rate adjustment must be cross referenced to those set forth in TILA; and
- That lenders adjust interest rates based on the most recent rate index figure available 45 days prior to the interest rate adjustment, instead of the current 30 days.
It will become effective Sept. 11.