We are exploring Risked Based Mortgage pricing for our portfolio loans.

The part I am having difficulty thinking through is how to quote this on the initial GFE and what can I change after underwriting.

Things like LTV, debt to income levels can change what we charge in points of rate for the loan.

1. Do any others out there do this?

2. Do you offer rate locks at application? I am thinking no.

3. So, my question is after we underwrite the loan we discover a need for a pricing adjustment and we need to charge points based on underwriting factors, since we cannot change block one, would we just add the points to block two line 3?

Thanks for your help.

1. yes
2. this would happen on loans where the rate is floating
3. at time of lock we show the charge in block 2 line 3 as you suggested.

On this type of product that will have a rate based on underwriting factors, do you not permit locking of a rate until the loan has been underwritten?

Our LOs run DU before locking, so we are usually able to capture most of any possible underwriting upcharges.

"We are exploring Risked Based Mortgage pricing for our portfolio loans. "

I am assuming that this risk based pricing is empirically based.

Define "empirically".

Based on proven facts...no fiction!

It's a proven fact if you are a WVU fan you are not as likely to pay your mortgage as a tOSU fan right?

When I say RBP, maybe a better term would be Loan Level Pricing
Based on adjustment for:

LTV, Score On Credit Report, Type of Collateral (Manufactured), DIR.

It doesn't matter what you call it, if you are varying your pricing you better be able to justify the variance if any of the factors could present a disparate impact.

You might want to review this thread:

http://www.bankersonline.com/forum/ubbth...rue#Post1517615