This might be a dumb question, but I'm confused....or over-thingking. So would someone mind answering anyway?

When the bank locks the rate, RESPA requires the GFE to be re-disclosed. I've always assumed this would be just to correct the "important" dates section of the form.

But would any fees typcially change due to the lock? I thougt all fees.....even unlimited tolerance fees..........would remain same as originally disclosed.

When the bank locks the rate, RESPA requires the GFE to be re-disclosed.

If you are referring to the bank locking the rate with an investor then a revised GFE is not required and in fact should not be issued because there is no qualifying changed circumstance.

The rate lock referred to by the regulation and the FAQs refers to when the consumer exercises a rate lock agreement.

You revise any disclosed fee that is directly affected by the rate lock executed by the consumer.

How can they swiggles when the rate generally dictates the fees?

Read the language for Important dates #1 and I believe it will answer your question for you.

OK....so poor choice of words. The customer wants to lock the rate and signs an agreement to do so. The rate is then locked with the investor. This requires a GFE re-disclosure.....right??????

So the lock might affect the daily interest total, the monthly payment total.

This Q&A has always made me want to run from the roon screaming.

Q: What charges can change before the interest rate is locked?
A: With the exception of interest rate-dependent charges and terms, the charges and terms for all settlement services on the GFE must be available for 10 business days from when the GFE is provided, or for such longer period of time as the loan originator provides in item 2 of the ―Important dates‖ section of the GFE. The interest rate-dependent charges and terms cannot change before the expiration of the period indicated by the loan originator in item 1 of the ―Important dates‖ section of the GFE. Between the period of time indicated in item 1 and item 2 of the ―Important dates‖ section, only interest rate-dependent charges may change until the interest rate is locked. After the expiration of the period indicated in item 2 of the ―Important dates‖ section, the loan originator is permitted to change all of the charges and terms on the GFE (assuming that the interest rate is no longer available, as indicated in item 1 of the ―Important dates‖ section). Interest rate-dependent charges and terms include: (1) ―Your charge or credit (points) for the specific interest rate chosen,‖ in Block 2 on page 2 of the GFE; (2) ―Your adjusted origination charges‖ on Line A on page 2 of the GFE; (3) ―Daily interest charges‖ in Block 10 of the GFE; and (4) interest rate-related loan terms, such as monthly amount owed.

This requires a GFE re-disclosure.....right??????

So the lock might affect the daily interest total, the monthly payment total.


Right.

Thank you very much!!!

It 'might' also include points if they've chosen to buy down the rate from what was on the earlier GFE.


p.s. Hi Swiggles!!

Hey Ping Lady!!

Thanks!!

I don't think I ever thanked you for the Christmas card. My life has been a madhouse.

You're welcome - and I've decided madhouse is normal!!

One more comment before someone orders us to take the discussion private.......I have a new boss......works me to death and then last week, my brother who had MS, passed away. I'm finding it hard to breathe these days!!! Take care!!

Is there a citation or commentary that indicates the rate lock only applies to rate lock agreement?

Q&A:

19) Q: If a GFE has been provided and the interest rate has not been locked, can the loan originator provide a revised GFE when the borrower later locks the interest rate?
A: Yes, if a borrower locks the interest rate after the GFE has been issued, a revised GFE must be issued within 3 days of the interest rate lock reflecting the date that the interest rate lock is good through in Line 1 and ―N/A‖ in Line 4 of the ―Important dates‖ section of the GFE. Any interest rate-dependent charges (Block 2, Line A and Block 10 on the GFE) and terms that changed must also be updated on the revised GFE.

*W*W*, if your FI operates like mine, the citation re: rate locks that Joker posted only partially answers your question.
You asked "Is there a citation or commentary that indicates the rate lock only applies to rate lock agreement?" and the answer is no, there is nothing that points to a rate lock AGREEMENT.
As I recall, Dan's bank has a rate lock agreement signed by the borrower which neatly ties the date of the lock in.
We do not use such an agreement.
For a floating application, the borrower only has to call and let the LO know that he wants to lock the rate.
If you look at the tool I submitted to BOL here you'll see that there is a line that reads 'borrower requested rate lock'. This has passed muster with our examiners for two exams now.

I have never said that a verbal rate lock by the consumer was not a valid rate lock agreement. Heck, 85% of our rate lock agreements are executed by phone.

What I have said, and what I will continue to say, is when the bank locks the rate with their investor is not a rate lock mandating a revised GFE.

We use an actual Rate Lock Agreement. Our loans are locked at application 99% of the time and we document it this way for rate spread purposes.

We act as a broker for a secondary market lender. Standard practice is to refer the loan to them first. If they turn it down, we'll decide if we can do it in house. The secondary market lender always locks in the rate. We don't lock the rate and don't offer a rate lock agreement.

When we issue the GFE we don't know if it's going to be an in house loan or not. That's where my question was stemming from.

I appreciate the responses. Love BOL.

My apologies, Dan. I confused you with Joker on the agreement statement.

As far as the investor locking the rate and your bank not knowing if the loan will be sold or kept in house, it would seem to me you have to do your original GFE based on the rate the investor will lock it at. If you end up keeping the loan in house and changing the rate, you must redisclose if you change the rate. Or am I misunderstanding something here...?

We do use a formal rate lock agreement but it can be executed by a phone call from the applicant. We have a "telephone" section on the agreement that is completed by the MLO when locked by phone.

If you end up keeping the loan in house and changing the rate, you must redisclose if you change the rate. Or am I misunderstanding something here...?

You can't arbitrarily change the rate if you have locked it with the applicant. If the rate is floating you can call up the applicant and tell them you're ready to to go to closing and this will be your rate. They either agree to accept the rate or they don't but that is not IMO locking the rate. At least in my environment it is not.

@Truffle Royale & @RR Joker - we just chatted about this last week under the "Reissued GFE dates?" . Following this....thanks