CFPB Issues Revised ARM Consumer Handbook

July 28, 2020
This revision replaces the prior January 2014 version of the booklet and is available for immediate use.

The Consumer Financial Protection Bureau announced a revised Consumer Handbook on Adjustable Rate Mortgages booklet to, among other changes, reflect the discontinuance of the London Interbank Offered Rate (LIBOR). The CFPB published a Notice of Availability in the Federal Register to alert the public to an updated version. While the changes to the booklet include removal of references to the LIBOR, which is expected to be discontinued in 2021, the CFPB made many additional changes. To start, the booklet has a slightly revamped design, which the CFPB states is intended to align to the Your Home Loan Toolkit in appearance more closely. As described in the Notice of Availability, additional changes include “a comparison table that describes adjustable rate mortgages and their differences in relation to fixed-rate loan products; an explanation of how an ARM works; a tutorial on how to review an ARM Loan Estimate and a lender’s ARM program disclosure; a comparison table for the various adjustable and fixed-rate loan offers that reader has received or will receive; and a description of the risks that come with different types of adjustable rate mortgages.” The booklet has also been revised to be more concise and is shorter than the current version by several pages. However, lenders may continue to provide the prior version if needed to use existing supplies but should use the updated version as soon as they are able.

Source: DocMagic