Profile: seanerwin92056
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August 28, 2012 6:27 pm
Seanerwin, welcome to Regulation Room and thank you for sharing your experience. Do you think CFPB should add another error to the covered error list to better address interest rate disputes? You might also want to read what CFPB says about adjustable rate mortgages
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I am a consumer with an usual mortgage where the interest rate is 8.05% for the first 5 years and then adjusts to LIBOR + 2.25% rounded to the nearest .125%. The first adjustment date is Sep 1 2012. After the first adjustment date, subsequent adjustments are subject to a 2% interest rate change cap.
The loan servicer, Green Tree, maintains that the 2% interest rate change cap also applies to the first change date, despite the fact that the mortgage documentation clearly states otherwise. In other words, Green Tree states that the new rate will fall to 6.05% on 9/1/2012, when in fact it should fall to 3%.
I have filed a complaint with the CFPB which has been forwarded to Green Tree, and we await their reply. Thank you very much for your service!
My comment is: When calling Green Tree… more »
I don’t know if Green Tree is a “small servicer”, but clearly their practice is to deflect and obfuscate any attempt by their customers to obtain a response to a concern, and to act by the letter of the law and not its spirit, when profits are in any way at stake. I applaud these proposed rules and thank you for allowing the public to comment so easily. « less
Thank you Moderator. I am but one consumer, one data point, and hesitant to extrapolate my experience into public policy proposals. But ARMs are indeed confusing, and there is a great variety of types of ARMs. My experience is that a mortgage servicer will seek to interpret an ARM’s language to its greatest benefit. One way this is done, in my experience, is to incorrectly calculate an interest rate at a change date. I would be happy to see another error added to better address interest rate disputes, as this may well be one type of deceptive practice the industry employs.