We don't have a Rate Lock program. Management has decided the following going forward -

Consumer mortgage loans will be given the rate from the pricing sheet that was applicable at application (date the Bank receives the application, not the date the customer signed the application). In the event the product changes before closing, the LO is to reprice the loan but will price it at the rate for that product from the pricing sheet that was applicable at application.

So based on this, would the rate set date always be the date of application (the day the Bank receives the application)?

In the event the product changes before closing, the LO is to reprice the loan but will price it at the rate for that product from the pricing sheet that was applicable at application.

If they change products on 6/5 and you reprice it on 6/5/ to what the rate was on 4/30 (application date) then you last set the rate on 6/5.

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
date.

the date of the original rate-lock

You don't lock rates with the borrower so IMO that guidance would not apply to your case because you are not relocking the rate.

However you might be able to rely on the "consistently follows" statement but I would suggest talking with your EIC before getting to far along in the program.

I'll email our relationship manager at Fed for guidance.

Thanks.