Once the servicer verifies the correct interest rate or monthly payment for each adjustment date that has occurred, it must re-amortize the mortgage loan to determine whether the borrower has been overcharged or undercharged.
The mortgage loan must be re-amortized from the date of the first erroneous adjustment through the date the LPI was applied.
The servicer must follow the procedures in Re-amortizing the Mortgage Loan in F-1-01, Servicing ARM Loans to complete the re-amortization.
See below for related Q&A’s:
For more information please see: C-2.2-01, Identifying and Disclosing Adjustment Errors.