How is an ARM loan selected for a rate and/or a payment adjustment?

How an ARM loan is selected for rate adjustments:

The criteria for selecting loans due for a rate change is based on the look-back days and the next rate change date.

For example: a loan with a next rate change of 10/1/2004 and a look back period of 45 days will be selected by the assistant for adjustment on or after 8/17/2004. On an earlier date, the index value would not be available.

How an ARM loan is selected for payment adjustments:

The criteria for selecting loans due for a payment adjustment is based on the next adjustment date, the notice lead days, and the loan's next rate change date. Please note that payment change notices must be sent at least 25, but not more than 120 days prior to the due date of the new payment.

For example, a loan with a next payment adjustment date of 11/1/2004 and a notice lead days period of 30 days will be selected by the assistant for adjustment on or after 10/1/2004.

Additionally, loans selected for a rate change will also be selected for a payment change if the payment change is scheduled for the same period as the rate change.

For example: a loan with a next rate change of 10/1/2004, a look-back period of 45 days, a notice lead days period of 30 days, and a payment change date of 11/1/2004 will be selected by the assistant for adjustment on or after 8/17/2004. This way, a single notice will be sent to the borrower advising him of both changes.

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