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Rate Lock

I locked in my rate for 45 days about a month ago at 5.35%, as you can see interest rates have droped.  My loan officer told me on friday I could have gotten a rate of 4.81% if I wouldn't have locked it in early.  I have asked my loan officer if there is anything I can do.  She has told me the other thing I can do is cancel my rate right now and wait 30 days to lock in a new rate.  Does this sound right?  Thanks for any help

  • May 24 2010 - Dublin
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Answers (14)

Profile picture for Blue Nile
Still don't know why the borrower locked so high...
  • July 13 2010
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 Pricing loans at 102 you have no idea what the rate is that I am getting so before you speak - think... 

Steve, didn't you tell everyone the rate for that yield?  


relocked them at 4.75% and still made 101.931 on a $199k loan.
  • May 25 2010
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I wish you the best in you venture, I will continue servicing my clients to the best of my ability and continue getting referrals.  Pricing loans at 102 you have no idea what the rate is that I am getting so before you speak - think...  Have a great night and go bonds....
  • May 24 2010
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Steve,

The difference between your service and mine is that I don't need to make a call to know if I have locked with a lender that has a renegotiation policy. 

Far too many lenders and brokers make light of the decision to lock in a rate.

Pricing loans at 102 on Zillow...you may as well pack it in now..
  • May 24 2010
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Andrew:
I know what the thread said, you obviously haven't read anything I said which was call your lender and discuss with them what they can do for you to lower your rate.  I have said that as a service to my client if I can lower there rate I will do so.  If I can't and they want to go to another lender then god bless and hope everything goes well.  But not once have you said that you would even try or make a call.  All you have said is that if the borrower locks in they are locked.  That is the difference between your service and mine.  I will go the extra mile and try to give them the lowest rate if time and money allows me.  If not I totally understand its their money and thousands of dollars they will save over the life of the loan.

Rudi - This coming from a guy who works in the nations top 5 foreclosure states I work with all the same lenders including BofA and I had someone locked in at 5% FHA 45day lock and relocked them at 4.75% and still made 101.931 on a $199k loan.  I did have 102.3 but I am not charging the client because my business is ran on referrals and by doing what I did I have received 2 purchase referrals from the realtor they were working with.  All because I did what I can to service them.
Also, I have two other loan officers who have lowered there rates with Chase and actually received better pricing when we had out last rate dip.  So folks like myself am not giving the people out their the wrong impression I am simply stating something that can happen.  As a seasoned loan officer... Let me give you some advice: Don't try making a living on one loan you will fall into being shopped.  Give your client the best service you can by not promising too much but then over deliver... 

  • May 24 2010
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@Steve,

Steve I don't know what lenders you work with. We are a direct lender (we underwrite and fund) for Citibank, Chase, Flagstar, GMAC, Sun Trust, US Bank, Wells Fargo......

None of which allow me to lower their locked rate unless my borrower agreed to an extra fee for a "float down" privilege, at the time the loan was locked.

Even with that option, the rate has to drop 0.25% to qualify. Most borrowers are not willing to pay for that. (You're past the days when you can hide that fact.)

Folks like you give the general public a wrong impression. I read your profile. You state you have been doing this for 10 years. I consider 10 years a seasoned professional. In your case, I'll make an exception. .... Happy funding, Rudi
  • May 24 2010
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Steve,

We are going to have to agree to disagree and as you burn locks with your current lenders to do what is in the customers best interest and those lenders no longer take locks from you or charge you a premium because of poor pull through, I want you to think back to this thread. 

The consumer decides when to lock, it would be a different ball game if they were forced to lock.

The lender isn't beating anyones rate they are taking advantage of a shift in the market.  What offends me is that the LO that took the original loan, earned the business.  The lo that comes in when the market has improved got lucky! 
  • May 24 2010
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Profile picture for Blue Nile
The rates quoted on Zillow have been fluctuating around 5% all year, so I'm baffled why you would lock at 3/8% higher than that, unless you just have poor credit or insufficient funds for a down payment to get a better rate.

Median being quoted on Zillow today is 4.61% for 30 year fixed, 680+ FICO, 80% Loan to Value ratio or lower.

It has been posted all year that there is no rush to lock; that rates will continue to fluctuate around 5%; and that one should definitely lock if they get offered 4.375% or 4.5% as the rates will not be going lower than that this year.

So, did your loan officer or Realtor do you a disservice by convincing you to lock prematurely?
  • May 24 2010
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Andrew,

I can see this hit a nerve and Service is about providing your client with the best rate you can give them at that time and explaining everything to them so they don't feel mis-guided.  The problem in this industry is that we have no right to hold a borrower to what they sign for..  Even if they sign a rate lock it doesn't matter because they can always pick up and leave if the rate drops an 1/8 or they can save $500.  This problem would stop if the government didn't step in and we can have them sign a contract stating after you lock if you go to another lender because of a lower interest rate or cost you will be charged a $2,000 fee for breach of contract with "Lender"...  That would stop anyone from shopping around and taking the rate they locked in at but that will NEVER happen.  We are looked at like used car salesman and I would gladly show you my list of locks within the past 30 days if you show me yours..  I can do the exact same thing you can because we have in house underwriting and our own warehouse funding..  There are many banks like us who can do the same thing you just mentioned, again it comes down to service and if I can save my borrower from going to another lender I will do what I can to make that happen.  If I can't then I hope everything goes well with the other lender and they get what they are promised...  Unlike you I am not worried if I lose business on the count of another lender beating my rate.  I know its going to happen and it has happend you just have to move to the next one.  Everyone thinks for themselves and as long as your ethical about everything then thats all you can do and let them make their own decisions...
  • May 24 2010
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Steve,

Service is not about breaking rate lock agreements.  Broker or lender when you lock the rate the rate is locked.  Sometimes you can work with a lender that offers the ability to renegotiate, however that is a conversation that should take place before you choose to lock in your rate... what happens if.

I have no issues with clients that choose to work with other lenders before they have made a commitment to me to lock the loan and get an appraisal. A shift in market conditions is not something the loan officer can control and has nothing to do with customer service. 

Tell you what why don't you provide me a list of your locked pipeline from 30 days ago and we see how happy you would be about a lender trying to get those clients to move over to another lender...I can close in 14 days...use a 15 day lock...



  • May 24 2010
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Andrew needing business isn't the problem and as you can read what I typed is that he should contact his CURRENT lender and see if there is anything they can do before he moved on.  My main focus is customer service and I tell all my clients if they call me and say they have found a better rate can you match.  I will do what I can to match that rate but if not I tell them straight out that its your mortgage and your the one making the payment.  I totally understand if $30 a month is a huge savings for some. 
You seem like more of a lender who is more worried about closing a loan and getting paid instead of thinking for the clients best interest.  If the lender isn't going to at least try to lower the rate then why should the borrower come back to you.  Obviously your not trying to service them the best you can.  Boxer it does suck for us lenders if that happens and I it has been done before to me but I am not trying to steal you I am simply telling you that if your current lender can't get you what you want and you need the service of a lender give me a call.  Not sure about your lenders Andrew but end lenders I deal with now allow us to lower the rates if the market has gotten better by a .25% so I have called on two loans that I have been able to re-lock to lower rates and to me that is looking out for my clients.. I deal  If not I wish you the best of luck in what ever you do
  • May 24 2010
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Profile picture for SVTBoxer
And I agree with you Andrew, thats the way I feel about it, but I have everyone and there mother telling me to go somewhere else.  Thanks, it was good to hear that.
  • May 24 2010
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Steve... Live by rate...die by rate!  You mustn't be that busy if you are trying to steel clients from other lenders that have already done the work on the loan!

What folks need to understand is that when you make the decision to lock your rate...it's locked!  If rates got worse you wouldn't allow the lender to up the rate on you! 

Sure you can choose to not honor your rate lock and go to another lender.  I know that the next time you need a loan...I won't bend over backwards to help you out.  As the loan officer I have no control over how the market moves, nor do I tell my clients when to lock in and when to float.  That decision is up to you...You expect the lender to honor their commitment to you...is it so wrong for the lender to expect the same from you?

  • May 24 2010
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It is basically right because when you tell a lender to lock you in your commiting to them that you don't want to risk the rate going higher and when the lender locks the rate in with the bank they are telling the bank this is what we are commiting too.  BUT if you can't wait another 30days you don't have to stick with that lender if they are unable to renegotiate the rate with the lender and lower it.  If I were in your position I would call your current lender and tell them you are going to see if another lender can give you a lower rate.  Now tehy will not want to hear that and maybe give you reasons why you shouldn't but if you have good credit scores and a decent downpayment every penny is worth it in the long run of an interest rate and if you have questions or need a 2nd approval and located in IL you can give me a call [contact info removed by moderator] American Fidelity Mortgage Service and see what we can give you as a rate for today.
  • May 24 2010
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