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#2268193 - 03/24/22 08:24 PM Charge Borrower for Pair Off Fee?
Jen J Offline
100 Club
Joined: Dec 2015
Posts: 144
Scratching my head on this one. My gut says "no", but...

Can we charge a customer for a pair off fee?

Borrower locked the rate for their purchase loan at an amount of $570,000. They have since contracted to sell their existing home and are now requesting a loan amount of $450,000 instead. This $120,000 reduction results in a pair off fee of $2,200. Can we treat this as a changed circumstance (borrower requested change) and pass the fee on to the customer? We don't normally charge any investor delivery fees on our loans.

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#2268198 - 03/24/22 09:11 PM Re: Charge Borrower for Pair Off Fee? Jen J
rlcarey Offline
10K Club
rlcarey
Joined: Jul 2001
Posts: 83,219
Galveston, TX
Well, it would be a changed circumstance but if " We don't normally charge any investor delivery fees on our loans.", then you have fair lending to consider.
_________________________
The opinions expressed here should not be construed to be those of my employer: PPDocs.com

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#2268199 - 03/24/22 09:12 PM Re: Charge Borrower for Pair Off Fee? Jen J
Jen J Offline
100 Club
Joined: Dec 2015
Posts: 144
Fair point (pun intended.) Thank you!

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#2268236 - 03/25/22 06:34 PM Re: Charge Borrower for Pair Off Fee? Jen J
Oursisnottoreasonwhy Offline
Platinum Poster
Oursisnottoreasonwhy
Joined: Nov 2004
Posts: 503
Central Illinois
What does your rate lock agreement say about pair off fees?

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#2268237 - 03/25/22 06:40 PM Re: Charge Borrower for Pair Off Fee? Jen J
Jen J Offline
100 Club
Joined: Dec 2015
Posts: 144
"This is not a commitment to lend and the loan is still subject to underwriting approval and satisfactory appraisal. Product changes, property changes, or borrowers qualifying criteria could trigger interest rate changes. Lender assumes no liability for losses or damages due to delays caused by you or third party providers that impact the interest rate expiration date.

I choose to lock my loan at the rate and terms indicated above and agree that the mortgage interest rate will be held until the expiration date shown on this form. I understand that the interest rate will not move up or down based on market fluctuations and that I must close my loan on or before the lock expiration."

The "terms above" include the loan amount, rate, points, and loan term.

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#2268239 - 03/25/22 07:05 PM Re: Charge Borrower for Pair Off Fee? Jen J
rlcarey Offline
10K Club
rlcarey
Joined: Jul 2001
Posts: 83,219
Galveston, TX
Rate lock agreements can be very specific based on some State laws. What that language will and will not allow would be best determined by your legal counsel.
_________________________
The opinions expressed here should not be construed to be those of my employer: PPDocs.com

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