Lock Lock..... Who's there?

ANNE....... . thanks for the polite compliment. Hence one reason why I wrote this. Everytime we are in one of these markets that rates drop, I need to drop everything to explain it to everyone again. Yes, people can break locks, but that's only if they drop drastically. Then again, define drastically. Just to many brokers that will make it sound easy. And for them at times, it can be easy. But they also have some ticked off investors, that at some times, will pull their funding of that brokers loans. Many loan officers don't understand that this money is actually locked, and it costs money to lock these.

BETH....... . lol, yes, to gamble or not to gamble. And so many people don't want to gamble, but then they run to the next lender in line, that will give them the lower rate. This just happened to me.... we had them fully approved and settlement was in 3 weeks. Another lender dropped their rate 1/8% and didn't charge the origination fee. Made me look bad. But this client never even called me up to see what I could do. Do we want to do this with our investors? No... but as you mentioned, if it's a huge change, we will do this. But we have a certain percentage that we need to close with these investors, when locking in with. Most brokers don't inforce this, so they don't lose loan officers.  But I wanted to educate the public on this. So many LO's mislead the public, thinking that they can and will do it all the time.

ROB & JEANNIE...... .  the indicators can be tough to read at times. I have done a good job in most cases. I had clients that wanted to lock in 2 weeks ago and I told them to float. Well, we picked up another 1/4%.....   but at the drop of the hat, things can and have changed for the worst.  You need a loan officer that knows not only what they are doing, but that understands the market and that can read the market.

JASON...... . thank you sir. Yes, I wanted to talk about those float downs from back then.... in the mid '90s to the late '90s.  But this is not the case now, even if someone says they can. I don't know one investor out there that always for a lock with a 30 day float down in today's market.   Again, thanks for the compliments.

KEN...... .  well, thank you very much for those kind words. It's much appreciative.  And yes, we are suppose to know exactly where the rates go, up or down.  But wait, my crystal ball broke. So I guess I can just assume and use my knowledge. There was a realtor on here stating that rates will be lower in January, when she settles. Wow, I wish I knew that. Her reasoning was because of the election and such. My response?  You can't just use that theory and the past. Our market can't sustain lower rates. We need to think long term, not short...

JENNIFER...... . wow... this can't be done all the time. Maybe they tell you this. And as I mentioned, even as a broker, you can't do this often. And if done, mainly when it changes by a 1/2 percent.... not 1/4 percent or lower....  we are actually locking in money at that time.  Yes, they can make promises and most aren't kept.... but you wouldn't give me business now if I didn't lower someone's rates if they locked in?   Just a curious question. Why even have lock in forms with float or lock on them? If they sign a lock form, can't I just raise the rate on them then?  Again, just curious...

SCOTT....... . that's funny... you stated.... "This issue goes as far back as electricity."  Yes, I remember those float down days. Gee, I wonder why investors don't offer them now?  And yes, this will always be a tender issue, because as you mentioned, we need to keep trying to educate consumers.

KIM...... . thanks for that polite compliment.... my phone has been ringing lately, that they want lower rates. And I got away from collecting lock-in fees for this vary reason. I lost a deal 2 weeks ago, and the client didn't even give me a courtisy call.  And the lender they went with only lowered the rate right below mine. Didn't even give the lower of lowest rates... lol   And yes, the bait and switch I can't stand and gives us a bad name. Hence why I also wrote about this, because as I mentioned, I have one consumer calling me weekly, that I won't change the rate on them.

LARRY...... . thank you very much sir. I agree, I hate when people negotiate after the fact. Gee, I wonder why some actually bait and switch. Pay backs?  lol  Hey, I know you and I wouldn't.....but again, you wonder why.

THESA........ .  thanks.....  this could have been longer... I wanted to add more....  I wanted to make this shorter, but to make this point strong, that was hard to do.  Again, thanks

PATRICK....... . yes, that is exactly right, fallout ratio. And you are abosultely right about agents telling clients that rates came down. Or thinking that their client deserves the lower rate.  But then why lock in? So yes, it doesn't help us.  Thanks for the feedback...

CHRIS........ .  thank you very much for that polite compliment.

MICHELLE....... .  I guess that is a question?  In any case, yes, there is a possibilty that they could lose their earnest money. I am not a lawyer and it could be possible that each state is different. You can definitely get your earnest/deposit money back if the lender gave you a denial. But in this case, per your question, with a good lawyer, you could get out of it and get your earnest money back. Why?  Because by law, when you change the terms or rate with fees, you are suppose to redisclose.  Many, many lenders don't. So, all the client would need to do is to whip out their good faith estimate, the application of 3 pages, and the truth-in-lending disclosure and bingo....  they can force the lender to give them what they were told. If not, at least bring it down some. Consumers need to pull out, stop, and or complain.... but do not sign. Many loan officers that pull these stunts, have a good idea that about 90% of the consumers/clients will still go through with the transaction.

One main thing.... to hear a lawyer say that they HAVE to sign.... I wonder what side that he was on.???

LEWIS...... .  for the most part, I locked in on Thursday.  As I told you last week, I figured rates to get worst by mid-week. Okay, so I was off about 1 1/2 days. In any case, thanks for the compliment.

JOYCE........ . thank you very much for those kind words and for stopping by.

JAMES........ . you can't always say lock, lock, lock, no matter what kind of market that we are in. A 60 day lock is more expensive than a 30 day lock. And depending on how the markets have been going, it is sometimes better to wait until you have 30 days left prior to closing. I have done that for a few clients in the last 2 months and in some cases, it's been a difference of 1/4% when all said and done. But I will leave it up to the client in most cases.  Just my .02.

TERI....... . great point and example. But the problem with all of this is that you have both loan officers and realtors telling the oublic and or their clients that lenders can still lower the rate. Yes, again, brokers can in many cases.....but if it's not a easy/sure deal, just that comment alone could backfire on a client. I have had it happen to two clients already this year. One didn't go to settlement for 2 more weeks, which cost them money.  Yes, education is key and explaining on it all works. Thanks for the polite compliment.