Let me pose a couple of scenarios. We have no formal rate lock agreement for the loans I'm questioning. Customer applies on 11/2. Banker quotes rate under stipulation that we risk base price. Underwriting decisions loan and determines rate on 11/4. At this point would the rate lock date be the date set by underwriting on 11/4. Throughout the loan process, underwriting may rerun the loan through risk manager for dti or ltv purposes but rate never changes from that set on 11/4...So again, would the rate lock date be 11/4...Same scenario, same dates....however appraisal comes back low. Underwriting runs through risk manager on 11/15 and because of ltv the rate changes on 11/15. Should the rate lock date now be 11/15 the date the final rate was reset by underwriting.

Or for consistency, should we just put a policy in place that says the rate lock date, is the last date that the loan is run through risk manager....rate change or not because ultimately that is the final date that the rate COULD change.

You can look at a loan a hundred times, but if you don't reset the rate, then the rate set date hasn't changed. You aren't resetting the rate on the subsequent times in which you are letting it stay the same, you are choosing not to reset it.

So based on your response....I'm assuming we would use 11/4 in example 1 and 11/15 in example 2.

I had a regulatory consultant tell me we needed to use the last date run through risk manager.....which is not consistent with what we were doing and this has raised some concerns....

I would like some insight on this as well. We have several HELOC's that are conditionally approved setting the rate on an earlier date with a condition that the CLTV is 80 or less once the evaluation comes in. If the value comes in low resulting in a CLTV over the approved amount, we issue a counter offer for a lower loan amount with no changes to the rate.

On one hand I see reporting the rate from the first approval since the rate never changes. However, on the other hand I can see reporting the later date since the loan technically was a conditional approval where not all credit/underwriting conditions (appraisal requirement) were not yet met.

The explanation of what is considered customary or credit/underwriting conditions is what is throwing me off.

Use the date that you last set the rate regardless if the rate changed.

Original approval on 4/11 and rate set at 4% as of 4/11.

Counteroffer issued on 4/18 and current rate reviewed and reset at 4% on 4/18.

4/18 is the last date the 4% rate was set.

I have one more question on this topic. So the example you gave of when to use the 4/11 date for the "Original Approval", would that approval be considered an actual approval since it is a conditional approval pending an acceptable appraisal requirement? Could it easily be argued that the rate is still not technically set until all credit/underwriting conditions are met?

Sorry if it appears that I am splitting hairs here but, we are currently looking at revamping how applications are approved in our software. Our old process has been that the underwriter would put the app in an approved status after giving a conditional approval in order to prevent a lender from making changes to the app. If the appraisal comes back in too low then it is placed into a counter status (or pending status depending on the situation) and then changed back into an approved status once the customer accepts. Issues within our software however, have put us down the path that all applications are left in a pending status until all credit/underwriting conditions are met.

I think we are leaning more to the date the status is changed to approved in the system.

Would you feel this date is acceptable?