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#20089 - 06/07/02 09:32 PM Rate Re-Lock Fee as Finance Charge

Our bank is considering charging a "re-lock" fee to mortgage loan applicants who want to re-lock for a different interest rate or loan program. I believe this will be a finance charge. Agree or not? Thanks!

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Lending Compliance
#20090 - 06/10/02 04:18 PM Re: Rate Re-Lock Fee as Finance Charge
Terry Offline
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Joined: Sep 2001
Posts: 314
I agree. A fee to lock the rate is a prepaid finance charge. A fee to do it again would also be a prepaid finance charge. However you mentioned that the fee could also be for an applicant that wants to move to a different loan program. I'm not as sure about that one. You probably need to lay out some more facts regarding how it would work.
All statements are my own and not necessarily those of my employer.

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#20091 - 06/11/02 04:41 PM Re: Rate Re-Lock Fee as Finance Charge
redsfan Offline
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Joined: Dec 2000
Posts: 3,455
The Pennant Race
Terry, I think it's a prepaid, regardless. The fee is still directly related to the credit transaction, and I can't find anything in 226.4(c)(7) tht could even remotely cover switching to a new loan program.
The opinions expressed here are personal and do not represent opinions of my employer.

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