Hi There,

I have a rate lock and was informed yesterday that due to an error with the pricing engine the bank who provided the lock will not be honoring the lock.

According to the bank the rate sheets were correct and they claim that their policy states that the rates sheets are in effect if there are any discrepancies.

What are my options here ? Is the rate lock which I have in my possesion legally binding ? THe lock will expire next week.

Thanks! 

Not unless you've received the actual loan committment with the bank your loan is placed with. That being said, there will be small print somewhere within the file that states they reserve the right to change pricing as they see fit. In other words, he who has the gold makes the rules. Do you have to close now? We're in a downward trend as far as rates go and I would expect you could probably do better than where you are now if you have a little time. Feel free to give me a call if I can be of any further assistance.

Dave

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I didn't pay anything and I do understand that they can either expire the lock or just not approve me, so I'm walking a fine line.

I got a 4.5% lock on a super-conforming loan of 600K and I'm closing for less than $3K. It's a super deal, which I don't want to walk away from.

Hilmi Ortadeveci:

I didn't pay anything and I do understand that they can either expire the lock or just not approve me, so I'm walking a fine line.

I got a 4.5% lock on a super-conforming loan of 600K and I'm closing for less than $3K. It's a super deal, which I don't want to walk away from.

Don't walk, run!  4.5%, 600k, less than $3k in fees? Nope.

4.5 on a $600k is at a cost of at least .625%= $3,750 right there.

Our state passed laws for locking loans and disclosure. I would contact your department of real estate or insurance (who ever oversees lenders) and see what they say.  I agree, mistakes are their problem not yours.  But on the other hand they can choose not to close your loan either way which doesn't help.

See what your state says and maybe they can light a fire to do the right thing (if possible) no matter if it costs them.