In regards to hybrid mortgages where the fixed rate period of the mortgage is longer than five years, there are three different dates that may be disclosed in the “Maximum During FIRST FIVE YEARS” column of the payment table on the Truth-in-Lending Disclosure (TIL) that are acceptable to Redwood Residential Acquisition Corporation (also known as Redwood Trust):
1. The transaction date (later of the note date or notary date on the note);
2. The first of the month prior to the first payment date; or
3. The first payment date.
Regulation Z (12 CFR §§1026.1 et seq.) requires “the earliest date on which [the maximum interest rate] may apply” to be disclosed in this column (see Ibid. §1026.18[s][i][b]), which could arguably be one of several dates.
Currently the disbursement date defaults in the aforementioned column for fixed periods over five years in ConformX. However, Redwood prefers one month prior to the first payment date to be disclosed in this column of the TIL. Therefore, the date that is one month prior to the first payment date will be defaulted in this column of the TIL for loans printed from ConformX Redwood ARM programs with fixed periods over five years.
This change will take effect for Redwood ARM programs on June 12, 2013. If you have any questions or concerns about these changes, please contact Client Support at 1.800.497.3584.
June 5, 2013