Thread Options
|
#2053247 - 12/09/15 03:05 PM
Rate Spread
|
Gold Star
Joined: Mar 2011
Posts: 335
Kansas
|
I know this has been discussed in many threads before but just for the record I need some help. We have examiners here and they are saying that the date we used for rate spreads is not right. Background --- the bank does not have a lock-in rates. So we have been using the date the application was received as that was the date the rate was quoted. The rate did not change when the final docs were generated. However, I am seeing on some of the threads we should be using the date the final docs were generated.????
|
Return to Top
|
|
|
|
#2053261 - 12/09/15 03:32 PM
Re: Rate Spread
Patricia
|
Power Poster
Joined: Oct 2009
Posts: 9,232
OK
|
I would think the danger in using the application date (if you truly don't lock rates) is that in a more volatile interest rate environment your bank might very well change (or want to change) the interest rate for an application that went on for a few weeks or months. Your current method seems to imply that you ARE locking in at the rate quoted at application. So if rates truly are floating, even though it might not have changed, your date doesn't work. That's my take anyway.
_________________________
I'm fixin' to fix that.
|
Return to Top
|
|
|
|
#2053269 - 12/09/15 03:48 PM
Re: Rate Spread
Patricia
|
10K Club
Joined: Nov 2002
Posts: 20,656
The Swamp
|
Agree with RJ
_________________________
My opinion only. Not legal advice. Say you'll haunt me - Stone Sour
|
Return to Top
|
|
|
|
#2053285 - 12/09/15 04:12 PM
Re: Rate Spread
Patricia
|
Power Poster
Joined: Jun 2003
Posts: 7,728
Florida
|
Agree. Since you do not lock, your rate/date would be when the documents are printed.
_________________________
Integrity. With it, nothing else matters. Without it, nothing else matters.
|
Return to Top
|
|
|
|
#2053288 - 12/09/15 04:16 PM
Re: Rate Spread
Patricia
|
Diamond Poster
Joined: Jun 2005
Posts: 1,343
|
For another perspective: the bank I was at prior didn't lock rates either. We established in procedure that the application date would be the date the rate was set, unless an appraisal came in and moved them to a different rate tier. Examiners were fine with that, as we established a set procedure and applied it consistently.
_________________________
CRCM
|
Return to Top
|
|
|
|
#2053327 - 12/09/15 05:39 PM
Re: Rate Spread
David Dickinson
|
Power Poster
Joined: Jun 2003
Posts: 7,728
Florida
|
Usually when the rate is not set, it "floats," usually to close. Under those circumstances, the banks I have been at sets the rate at the prevailing rate when the documents go to print.
_________________________
Integrity. With it, nothing else matters. Without it, nothing else matters.
|
Return to Top
|
|
|
|
#2053458 - 12/09/15 11:32 PM
Re: Rate Spread
Patricia
|
10K Club
Joined: Jul 2001
Posts: 84,327
Galveston, TX
|
It's when the loan officer sets the rate. It's that simple.
Well, maybe and maybe not. In the 80's, mortgage rates floated until the day of closing unless a rate lock agreement was executed. Two days could mean the bank was underwater by several hundred basis points. People have become a little lackadaisical in this stable interest rate environment. When I was working at a bank, a loan officer never had the authority to "lock a rate" unless an official rate lock agreement was executed.
You need to sit down with the head of your ALCO committee and ask them if these so called unofficial rate sets would hold any water if rates jumped 2 percent in the next ten days before you decide when a rate is set on a loan,.
_________________________
The opinions expressed here should not be construed to be those of my employer: PPDocs.com
|
Return to Top
|
|
|
|
#2053873 - 12/11/15 09:07 PM
Re: Rate Spread
Patricia
|
10K Club
Joined: Aug 2002
Posts: 47,673
Bloomington, IN
|
Where there is no formal rate lock agreement then for us the date is always the date the loan documents are prepared. That is the date the rate is set for the final time from the rate sheet that is in effect for that day.
_________________________
The opinions expressed are mine and they are not to be taken as legal advice.
|
Return to Top
|
|
|
|
|
|