Good morning!

LE issued 11/23 with rate lock expiration date of 12/02. On 11/28, changed circumstance LE for lock extension was issued and extension fee of $400 added. I told the LO/LP that we'll need to eat the $400 charge since the rate lock had not expired. Can a CC LE for lock extension be issued prior to the rate lock expiration date and a fee for lock extension be added?

Thanks!

Why not? I assumed the borrower agreed to the extension and signed the extension agreement.

thanks, Randy! Rate lock date was throwing me.

The extension would likely be pushing the expiration date farther out. This is a valid fee to pay for and is a COC. They must have some inclination that the deal won't be finished by the current expiration date.

And if there isn't a rate lock extension agreement, would we still have a leg to stand on for charging them this fee?

No. You don't have a changed circumstance without a written agreement with the customer.

That was my thought, thanks!

Update on this one, thy have now started getting letters from the borrowers regarding them being ok with being charged a discount point for the extension. Would this still be valid if it is in writing from the borrower?

Dear Bank

Go ahead and charge me a fee.

Thank you,

Signed Consumer

Somehow, I don't think that your legal counsel would deem that a written lock agreement, but that is who you need to be asking. Why would a customer, on their own, write such a letter to the bank?

Believe me, this is one of the up-hill battles I fight everyday! I will take it to our legal counsel and verify the validity. I'm not ok with the letters, but am getting overridden constantly.