Does the Mortgage Company have to tell me my ARM is going to adjust?

We get people that contact us daily about questions with their Adjustable Rate Mortgages. The main complaint they have is that the Mortgage Company did not notify them that the rate is going up, which affects their payment.

The bottom line is that they don't have to notify you of the rate increase. When you signed your Mortgage Note the details of how and when the rate could increase were stipulated clearly. It is your responsibility to know when this increase can happen and be ready for it.

"Litton pulled double mortgage on 2nd and did not take out 1st, did not notify us of increase in the ARM."

Most problems come from these increases when the home owner is not prepared for the increase and can't afford them. This is the problem with the ARM's... you need to be able to afford the payment when it increases, because it will. If you can't afford the increase you need to refinance before it adjusts or not get in one from the beginning. They are a ticking time bomb and they will explode.

Many articles have been written about Brokers who are getting people into these loans knowing full well that they won't be able to afford the payments when the ARM adjusts. Some legislation has been proposed that would require home owners to qualify for the highest rate the loan could go to insure that they can afford the increases. Whatever happens in the future that will not help those that are are in the crunch now. Our only guidance is to try and get out of the ARM any way you can if you know you won't be able to afford the increases that are coming.