We have an MLO who locked the wrong rate, a rate lower than the one intended. Additionally, a larger credit was provided due to the LO intending on the higher rate. The customer has signed all documents and the LO has now realized their mistake. I think this is something we are going to have to just eat and take the disclosure as our, however, I am trying to assist in finding a solution. Can we do a changed circumstance - revisions requested by customer if the customer puts down in writing they understand the error and agree to the changes? We could let the rate lock expire but I am unsure if the borrower wants to wait for that to occur.

A contract has been signed.
You're done.
What borrower is going to agree to pay the price for your MLO's mistake?
It's unfortunate but the bank is going to have to eat this one. Hopefully it's not that big of a hit.

The customer has signed all initial documents, we have not closed or proceeded to closing. I agree it is not likely that the borrower will agree to this but the MLO thinks the borrower will. I did not know if we could get it in writing from the borrower that they understand the error and then treat that as a revised changed circumstance requested by the borrower.

This does not appear to have anything to do with the borrower. An error on a lender/investor lock is the lender's problem.

An error on a lender/investor lock is the lender's problem.

What Randy said. A bank error is never a legitimate cause for a changed circumstance.

Thanks all, that is what I figured and have relayed to the MLO, that this was an error that the bank would just have to accept and move on.

We just had this same scenario the other day - glad to see we made the right call. Thanks BOL!