Many FHA mortgage lenders fail to calculate the FHA using the current index. For the TILA to be in compliance for an FHA variable rate mortgage loan, the current index must be used and that is the index available at time of consummation. This will all be used to calculate a current fha apr for TILA purposes.
Many document examiners are concerned with the current fha apr when evaluating an FHA mortgage loan for compliance with the TILA. If the FHA mortgage loan is out of compliance because the current FHA APR was not used for calculating the final Truth in Lending statement, then the FHA borrower may have recourse against the mortgage lender.
When the FHA mortgage loans are passed around and the servicing rights of the lender are traded around like a hot potato, you must still be concerned for the current FHA APR calculations on the TIL. The lender takes assignment and is considered a holder in due course and protected against many claims that would otherwise be actionable against the originator. One claim that an assignee can not escape, however, is one that is evident on the face of the documents. And that is, you guessed it, the current fha apr. Otherwise known as todays fha apr.
For a more detailed analysis of current fha apr, check the updated post on the FHA Loan Expert Blog as follows: Current FHA APR.