[rlawrence]

We are having a debate about what date we should be using for the rate lock for the spread on our loans. There may be times when we need to do an extension so the lock does not expire prior to closing. If we have to do the extension, should we be using the original lock date or the date the extension was done? The rate does not change when we do the extension. Any guidance would be greatly appreciated. Thank you.

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[rcooper]

Use the date on which you set the interest rate for the final time before final action is taken.

Comment (a)(12)-5.i states:
i. Rate-lock agreement. If an interest rate is set pursuant to a “lock-in” agreement between the financial institution and the borrower, then the date on which the agreement fixes the interest rate is the date the rate was set. Except as provided in comment 4(a)(12)-5.ii, if a rate is reset after a lock-in agreement is executed (for example, because the borrower exercises a float-down option or the agreement expires), then the relevant date is the date the financial institution exercises discretion in setting the rate for the final time before final action is taken. The same rule applies when a rate-lock agreement is extended and the rate is reset at the same rate, regardless of whether market rates have increased, decreased, or remained the same since the initial rate was set. If no lock-in agreement is executed, then the relevant date is the date on which the institution sets the rate for the final time before final action is taken.

This previous post might also be helpful: https://mycomplianceresource.com/forums/topic/rate-spread-rate-lock-date-and-apor/.

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