Unapproved Mortgage Rate Lock Extension Fees

by Laura from Texas

Ask Kate how to avoid unapproved mortgage rate lock extension fees: Kate, today the private bank we are refinancing with sent me a new Good Faith Estimate and paperwork listing several thousand in fees that we must pay in order to get the original low locked-in rate to cover their "hedging".

Laura continues... The banker was very slow in processing our paperwork. We are now 70 days from the date the lock-in agreement was signed. The lock-in agreement was left blank in the "date lock-in expires" line, but the Good Faith Estimate listed it as good for 30 days.
Unapproved Mortgage Rate Lock Extension Fees

We had provided the last of the additionally requested information 30 days after the lock-in agreement was signed (about 45 days ago), so the last month and a half of the delay has been all due to them.

He also never told me that he was re-locking our mortgage rate. Whenever I had called to check on the status, the impression I got was that everything was going to stay the same and it was just taking awhile.

We are thinking of walking away- do we have any options or are they probably hoping we go away?

Should we consider contacting regulatory agencies to complain?

Kate Answers: Unapproved Mortgage Rate Lock Extension Fees

Ask Kate at Get-Your-Best-Mortgage-Rate.com

Dear Laura,

Sometimes it's best to remove yourself from a situation when there is very little hope for turning it around.

In other words, cutting your losses.

I say this because although you could stay and fight for your rights, mortgage interest rates are volatile. They may remain at all-time lows, but no one can adequately predict the future.
Be sure to follow the links to select pages on my website. I have chosen them specifically for your situation.

Reputable Mortgage Lenders and Trustworthy Rate Lock Agreements

Why waste time trying to get unapproved mortgage rate lock extension fees waived while you could be locking in a decent rate at a reputable institution?

Moving on to another mortgage lender may be the best thing to do. But of course, I don't know your situation so this also depends on your ability to get approved for a home loan at another bank.

But let me say, I find this bank's behavior disgusting. Omitting an expiration date on a mortgage rate lock form is no excuse to charge you exorbitant lock-in extension fees. You didn't fill out the form, after all!

Yet, they are putting the cost of their omission on you.

Hedging vs Locking in a Mortgage Rate

I'd like to know where the bank's hedging fee appears on your original Good Faith Estimate! Even more so, the bank's hedging fee is NOT YOUR CONCERN! Plain and simple, they were hedging to play the market. It's a game.

Then your rate expired (that is, if you were ever locked in the first place) because the mortgage company did not process your refinance in a timely fashion.

And now they want to pile a so-called hedging fee on you too? How insulting!

Of course, you may be able to negotiate lower mortgage refinancing costs on the Good Faith Estimate by kicking and screaming. But in the end, can you trust that the negotiated fees will be all that's charged at the time of closing... especially with the bank's past behavior?

How to Really Get the Best Mortgage Rate

If you decide to switch lenders, don't shop for the lowest mortgage rate. Does this seem odd considering the name of my website is Get Your Best Mortgage Rate? It's with good reason that I tell you this.

Calling up lenders and telling them you are shopping for the lowest mortgage rate is like putting a sticky note on your forehead saying Please Take Advantage of Me!

Actually getting the best mortgage rate requires you to understand the lending process. This is why I started Ask Kate in 2007 - To empower home buyers and homeowners to get their best interest rate by unlocking the secrets of mortgage lending.

Please read more about shopping for mortgage lenders and affordable monthly house payments at Little Known Secrets To Refinancing.

In closing, equip yourself by understanding how to lock in your interest rate. This is the best way to avoid mortgage rate lock extension fees. Go to my Mortgage Interest Rate Lock Series and follow the links for further assistance.

Good luck and best wishes,

Ask Kate

P.S. I also recommend writing your local, state, and federal representatives in the government. Start by contacting Texas Department of Savings and Mortgage Lending at 877-276-5550. Make your voice heard!

Ask Kate's 2015 National Mortgage Affordability Newsroom

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December 2014: Don't miss the four new financial incentives designed to generously benefit struggling homeowners.

The more you read my blog's Mortgage News, Updates, and Insider Secrets, the more you'll learn to navigate the lender maze.

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You'll find even more questions and answers at Ask Kate about Mortgage Rate Locks.

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Locked In Mortgage Rate Extension
by: Nanna from PA

Can a bank automatically extend the date for a locked in interest rate for a refinance? My bank did that and rates have gone down. Can I go to another lender?

Hi Nanna, Kate here...
If the lock agreement does not say they can extend your lock without your approval, then nope they can't!

Right now, sit down and pull out your signed rate lock agreement. Read it through to see what terms you agreed to. If you never signed the lock form, request a copy. If there is no agreement signed by you, insist on getting today's lower rate.

Generally speaking, you can switch to another lender. But you may have agreed to paying a cancellation fee. But to be enforced, the fee must be in writing and your signature must be on the document.

Read about mortgage interest rate lock agreements here.

Best wishes, Kate

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The information you obtain at this site is not, nor is it intended to be, a substitute for personalized professional advice. All numbers are estimated and are for illustrative purposes. Rates are published for convenience only, vary with no advance warning, are not guaranteed, and should not be relied upon. You are encouraged to consult a lender for a current rate quote and seek advice from qualified professionals, for example, attorneys, accountants, financial planners, housing counselors, mortgage lenders, and/or real estate agents, regarding your individual situation. Comments and opinions found here are not necessarily those of Get-Your-Best-Mortgage-Rate.com and its owners.

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