Are there legal limits on margin amount.

betty_4149 · Joined: 19 Aug 2008 Posts: 1 1.31 Dollars($)

My lender added 5.3750% to my ARM current indext in 1999. Is this legal? Should I get an audit or has the statute of limitations run out. I live in Alabama

Guest 0.10 Dollars($)

I would read your loan documents (including the note, mortgage and all sections that deal with how the interest rate will be determined. This is a legally binding document. If you feel your lender has changed the terms and violated this agreenent, you should definitely seek legal counsel.

Guest 0.10 Dollars($)

I should have also added that ARM rates are figured by adding a margin to the index...the margin that is added to the index should be clearly indicated in your loan documents. There are different types of ARMS with different indexes, but the terms, the index used and the margin that will be added to the index should be clearly stipulated in your original docs.

gmakerley · Posted: Tue Aug 19, 2008 9:36 am Post subject:

it is highly unlikely that the margin changed post-closing. as bailey noted, your original closing documents should have spelled out all this information.

clearly, if there's been a change in the margin for whatever reason, i would suspect some funny business and would seek clarification immediately. if it truly did change - contrary to the original documents - whoever supervises this lender (federal agency) would need to get involved and slap their hands.

adonis · Posted: Tue Aug 19, 2008 11:22 pm Post subject:

As per my knowldege of ARMs, the margin remains constant. And what varies is the index. So, I suppose betty, you should first check out the loan docs and then talk to the lender.

Hey bailey, you seem to be giving some good advice to the guys posting here. Why don't you join the community and be a part of it? It'll be nice to have someone like you around.

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