That being said though, the example for rate lock in the Small Entity Guide indicates that if a change is made and the loan is repriced back to the pricing in play at an earlier date for the new product, then the earlier date is the rate set date. I was applying that logic to my scenario above. Would that not be correct?
Example: Borrower locks a rate of 2.5 percent on June 1 for a 30-year, variable-rate loan with a
5-year, fixed-rate introductory period. On June 15, the borrower decides to switch to a 30-year,
fixed-rate loan, and the rate available to the borrower for that product on June 15 is 4.0 percent.
On June 1, the 30-year, fixed-rate loan would have been available to the borrower at a rate of 3.5
percent. Ficus Bank offers the borrower the 3.5 percent rate (i.e., the rate that would have been
available to the borrower for the fixed-rate product on June 1, the date of the original rate-lock)
because the original agreement so provided or because Ficus Bank consistently follows that
practice for borrowers who change loan programs. Ficus Bank should use June 1 as the rate-set
Always learning something new...