I am trying to determine the correct date for the Last Rate Set Date. My bank locks rates with investors. We have been extending (at no charge to the borrower and normally borrower is completely unaware of the rate extension) a lot of locks lately with investors prior to the expiration date. When we extend the lock, the investor lock confirmation indicates the original rate sheet date. Do we use the original rate sheet date as our APOR Last Rate Set Date? Or would we use the day we log into the investor website and request the extension?

What you do with an investor is irrelevant. If you are not executing a rate lock with the consumer than you use the "Date on which the Financial Institution set the rate for final time before final action is taken". See 2020 HMDA- GIR starting at page 96.

Thank you for your response as we were getting conflicting information that was telling us that even though we had a rate lock agreement with the applicant and it was not changing, we would need to adjust our last rate set date based on our agreement with the investor in a case where an extension was requested from them.

To your point, what bothers me is, that we execute rate lock-ins our secondary mortgage department through a signed agreement with the borrower. Then, when a lock-in needs to be extended, it might be done between us and the investor without an agreement with the borrower. It seems another agreement with the borrower though isn’t necessary on whether to use later extension date, as it says “if a rate is reset after a lock-in agreement is executed (for example, because the borrower exercises a float-down option or the agreement expires), then the relevant date is the date the financial institution exercises discretion in setting the rate for the final time before final action is taken. The same rule applies when a rate-lock agreement is extended and the rate is reset at the same rate, regardless of whether market rates have increased, decreased, or remained the same since the initial rate was set."

What do you think? Should we use the later extension date since it was our discretion whether to extend the rate or not?

As with all things - just be consistent.

It all depends on how you interpret this:

"the relevant date is the date the financial institution exercises discretion in setting the rate for the final time before final action is taken."

If a rate lock expires and you choose to continue to honor the rate that was previously locked-in without formally re-locking or extending the interest rate lock, did you not exercise discretion at that point? The rate could have very easily have been adjusted. In the interest rate environment that we have now been in for years (long enough that some people working in the industry know no other environment), leaving the rate the same has been pretty common. Some lenders say they set the rate at application. What I can tell you is that those days are soon going to be over.

Randy, thanks. Good advice.