Randy, thank you for the response. Just to be clear "If you entered into a rate lock extension with the customer on 5/1" ....the bank does not have the borrower sign a revised lock-agreement to extend the expiration date, however the initial lock agreement (that is executed by the borrower's) dated 4.1.21 does have an expiration date. With these details would the final rate set date still be 5/1? I just cannot get this straight in my head and need to as we may need to change our procedures. Below is the interpretation from the regulation. I interpret this to read as when you have a lock-in agreement with the borrower, anytime the rate changes or the lock is extended the relevant date is the date the financial institution exercises discretion in setting the rate for the final time before final action is taken. A revised lock-in agreement from the borrower is not needed.
i. Rate-lock agreement. If an interest rate is set pursuant to a “lock-in†agreement between the financial institution and the borrower, then the date on which the agreement fixes the interest rate is the date the rate was set. [b]Except as provided in comment 4(a)(12)-5.ii, 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. If no lock-in agreement is executed, then the relevant date is the date on which the institution sets the rate for the final time before final action is taken.