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#1115953 - 01/23/09 03:31 PM Fair lending questions on a preferential rate
Sullivan Offline
Member
Joined: Jan 2009
Posts: 51
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!

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Lending Compliance
#1116026 - 01/23/09 04:31 PM Re: Fair lending questions on a preferential rate Sullivan
RR Joker Offline
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RR Joker
Joined: Nov 2002
Posts: 20,654
The Swamp
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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#1116128 - 01/23/09 05:38 PM Re: Fair lending questions on a preferential rate RR Joker
Ray_ Offline
Platinum Poster
Joined: Aug 2006
Posts: 879
Dallas, TX
I agree, you have a have a viable reason for giving the better rate.

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#1116192 - 01/23/09 06:10 PM Re: Fair lending questions on a preferential rate RR Joker
Sullivan Offline
Member
Joined: Jan 2009
Posts: 51
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!

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#1116220 - 01/23/09 06:47 PM Re: Fair lending questions on a preferential rate Sullivan
Rocky P Offline
Power Poster
Joined: Jun 2003
Posts: 7,650
Florida
So, you were rate matching! Banks do it all the time. Just document the reason.
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