[KRT]

In the Rate Lock section on the Loan Estimate, must there be a written lock agreement signed by the customer to mark “Yes” for Rate Lock? Many times we find that the rate lock agreement is signed only by the loan officer at the time the Loan Estimate is delivered. The loan officer has gotten the borrower’s verbal agreement to the rate lock, but no signature yet.

[rcooper]

You need a agreement between both parties. Neither the regulation or commentary specify written, nor does they state verbal is acceptable. Most in the compliance industry (auditor, examiners, compliance officers, consultants, etc.) believe the agreement must be in writing to be able to disclose a rate lock agreement on the LE. I would suggest you do training and enhance your procedure to require rate lock agreements to be signed by both parties.

Reg Z Commentary 37(a)(13) states:
1. Interest rate. For purposes of § 1026.37(a)(13), the interest rate is locked for a specific period of time if the creditor has agreed to extend credit to the consumer at a given rate, subject to contingencies that are described in any rate lock agreement between the creditor and consumer.

[jholzknecht]

The preamble to .37(a)(13) states, “where a creditor has a policy to honor the quoted rate, but does not lock the rate pursuant to a written agreement with the consumer, the creditor would disclose “NO” pursuant to § 1026.37(a)(13)(i).” The preamble is not part of the regulation or the Commentary, but it certainly strengthens Robin’s argument.

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