“ARM” Yourself for Volume Increase and Avoid Common Compliance Pitfalls

Part 3 of a 3 Part Series

In our last article we recapped items necessary to comply with the Ability-to-Repay (ATR) and Qualified Mortgage (QM) requirements when underwriting the loan. Compliance with Regulation Z does not stop at origination. This article recaps the servicing requirements for ARM loans.

Loan Servicing and The Bank’s Core System

ARMs are a little more complicated with more moving parts. Unlike a fixed rate loan, you can’t “set it and forget it.” Data entry in the Bank’s core system is more complicated, and like the LOS there are items that require ongoing maintenance to ensure that ARM Adjustment notices are produced correctly.

Check your set-up sheets and make sure that there is a Quality Control (QC) process. A Quality Control process should be implemented to ensure that data has been correctly onboarded into the core.