We are giving a new borrower a better interest rate on a residential mortgage loan than our advertised rate (this is an in-house mortgage loan). Credit score, LTV & debt ratios are all very good; howwever, we have never given a borrower a better rate than our published rate and our loan policy does not specify that we change our rate based on the above factors. I'm a little concerned that this might raise a fair lending question by examiners. Any thoughts would be appreciated!
Why are you giving a better rate...to get the business? To get HIS business? Is this an isolated case, or might you see more of it (which might be a bigger problem, IMO)
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My opinion only. Not legal advice.
The borrower had received a commitment letter from a different bank with that rate, and there is also the potential of getting more business from him. I'd like to think this will be an isolated incident, but once it happens once, you can never be to sure!