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A loan applicant signed a rate-lock agreement, which was delayed past the end of the 45 day expiration period. To honor the rate, the bank had the applicant sign a second rate-lock agreement. What date should be entered in the FFIEC's Rate Spread Tool under Rate Set Date: the date of the original agreement or the date of the second agreement?

An applicant for a loan subject to reporting under the Home Mortgage Disclosure Act signed a rate-lock agreement that was to expire after 45 days. However, due to delays, the loan was not scheduled before the end of the 45 day period, so, even though rates had changed, the bank had the applicant sign a second rate-lock agreement with the same rate as the previous lock rate agreement. What date should be entered in the FFIEC's Rate Spread Tool under Rate Set Date: the date of the original agreement, as that is the date the rate was established, or the date of the second agreement?

The date of the second rate-lock agreement. When determining the rate spread, the relevant date used when a rate is reset after a lock-in agreement is the date the financial institution exercises discretion in setting the rate for the final time before action is taken. Comment 5.i to §1003.4(a)(12) of Regulation C clarifies by stating, “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.” (February 2021)

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