Can My Mortgage Interest Rate Be Locked Without My Consent

by Pat from Belhaven, North Carolina, USA

Can my mortgage interest rate be locked without my consent? Hi Kate, My loan officer says he locked my interest rate because rates were rising. I only found out after a new good faith estimate (GFE) was issued by the lender.


Pat continues... They also changed the GFE to include a prepayment penalty, which they say is credited to my mortgage closing costs. The loan officer says the prepayment penalty is only for the first year?

The interest rate that he locked raised my monthly house payments by $40. Is it legal to lock my mortgage interest rate without asking me?

Kate Answers: Can My Mortgage Interest Rate Be Locked Without My Consent

***zz-portrait-left.shtml*** Dear Pat, Good question!

Locking interest rates is at the heart of every mortgage transaction.

But how does a homeowner take charge of getting a mortgage that mirrors the interest rate and mortgage closing costs of the good faith estimate?

They Get Their Mortgage Rate Lock Terms In Writing!

Since this is my mantra on this website, I am going to assume you did. If you didn't, make that the last time you depend on verbal mortgage agreements.

Who Has Authority To Lock Your Interest Rates?

Now back to the matter of your interest rate being locked without your permission.

Although banks and mortgage companies issue required disclosures, they can vary from state to state. So go back to your written mortgage rate lock agreement, looking for a provision giving authority to your loan officer to lock your interest rate without your consent.

Regardless, I would still ask these questions.
  • Why wasn't I called before my interest rate was locked?
  • Where can I verify that mortgage rates were increasing on the day I was locked?
  • Who chose to impose a prepayment penalty on my mortgage?
  • Why wasn't I given options for no prepayment penalty?
  • Where is the guarantee in writing that the prepayment penalty is for only one year?
  • Were my closing costs credited the entire rebate from the prepayment penalty?
  • Where is my written confirmation of mortgage rate lock terms?
No suitable answers still? Like I always say, start up the ladder, rung by rung, supervisor by supervisor, until you are satisfied that your questions are being answered.

While mortgage rate lock problems are still front and center to a loan process (see Ask Kate Mortgage Rate Lock questions & answers), much heartache, time, money and hassle can be avoided by asking crucial lock-in questions upfront and expecting all answers to be put in writing.

Pat, one more thing. I'd like to hear back from you. Let me know if this page is helpful to you.

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Locking In Mortgage Interest Rate
by: Lew from Lake Havasu City, AZ

I have been pre-approved by a on-line bank. The loan officer said that I must wait until I have an accepted offer on a house before he will lock in a interest rate.

I cannot buy a house until later in September, but I would like to lock in a rate while they are low.

Do all banks and mortgage companies have the same rule for locking in rates? Lew

Hi Lew, Kate here. You might remember Countrywide Home Loans, recently purchased by Bank of America. During their heyday, they offered a popular Lock and Shop home buyer program. But at that time, few banks were offering the same plan for locking rates before entering into a purchase and sale agreement with a seller.

Today, policies among banks and mortgage companies continue to vary. That's why asking qualifying questions before applying for a mortgage will help homeowners keep from being swayed by low interest rate quotes that never materialize.

I also recommend requesting a copy of mortgage rate lock-in agreements since verbal promises are less than reliable.

Best wishes, Kate

Mortgage Loan Modification
by: Anonymous

Can your wife or husband ask and do a loan modification on your property without your consent? If so what is the penalty?

Hi Kate here. I can't answer to the legalities or penalties not being an attorney.

The majority of my experience is in institutional mortgage lending. To close transactions, most lenders I worked with required notarized signatures from parties currently on title and the mortgage, as well signatures from anyone going on title and the mortgage.

They would reluctantly agree to a power-of-attorney under certain circumstances.


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