INTRODUCTION Many products and pricing options are offered to meet market demand. RATE SHEETS Rate sheets provide program and pricing information. Rate sheets are distributed in the morning of each business day via e-mail and are posted on the website. When pricing changes occur during the day, updated rate sheets are distributed. (Refer to the Intra-Day Price Change process) Rate sheets are subject to change without notice based on market fluctuations INTRA-DAY PRICE CHANGE An Intra-Day Price Change is a change in pricing that occurs after rate sheets have been distributed. As rates are subject to market fluctuations, adjustments to pricing may occur throughout the course of normal business hours and require adjustments to the rate sheet. In the event of an intra-day price change: An e-mail notification indicating that an Intra-Day Price Change is in process will be provided. Lock requests submitted prior to the price change that have not yet been processed, will be price protected upon validation of the system time stamp. After pricing has been updated, revised rate sheets are distributed via e-mail. These rate sheets are marked REVISED INTRA-DAY PRICE and include the effective date and time. 10/10/13 Page 1 of 8
LOCK HOURS In general, locks are accepted Monday through Friday (except for Holidays and days when the US Fixed Income market is closed) at the following times: 8:30 a.m. to 4:00 p.m. PT. The following are Lender observed holidays and lock requests will not be accepted: New Year s Day Martin Luther King Day President s Day Memorial Day Independence Day Labor Day Columbus Day Veteran s Day Thanksgiving Day Day after Thanksgiving Christmas Day We reserves the right to stop accepting locks at any time due to severe market disruption. LOCK PERIODS Lock periods extend from the lock date to the lock expiration date. If the lock expires on a weekend or Lender observed holiday, the lock will be extended to the next business day at no charge. Lock protection is offered for the following time periods: 15 Day* 30 Day 45 Day 60 Day * The loan must be in Conditional Approval and prior to documents (PTD) conditions must have been signed off by the Underwriter with the exception of the following: Document Request Final signed 1008 (Lender condition) Final AUS (Lender condition) NOTE: Loans with a "TBD" property address are not eligible for rate locks. 10/10/13 Page 2 of 8
FORWARD LOCK PROCEDURE A Forward Lock is a rate lock on a data upload /manual entry that has not yet been converted to an acceptable submission. A Forward Lock is valid for a maximum of: 10 days (for a 30 day lock) OR 15 days (for a 45 or 60 day lock) Forward Locks must be converted into an acceptable submission within a maximum of 15 calendar days (from and not including) the date of a data upload /manual entry (as defined above and described below). Refer to the Loan Submission Procedure for details regarding an acceptable submission. NOTE: A Forward Lock does not extend the allowable number of days to submit an acceptable submission. A 30 day Forward Lock is valid for a maximum of 10 calendar days from (and not including) the day of the upload /manual entry. A data upload /manual entry that becomes a 30 day Forward Lock (within 15 calendar days from (and not including) the date of the data upload /manual entry) will have the lock expired after 15 days from the upload /manual if not converted into an acceptable submission (refer to the Loan Submission Procedure). A data upload /manual entry locked on the 15 th calendar day has only that day to become an acceptable submission. A 45 or 60 day Forward Lock is valid for a maximum of 15 calendar days from (and not including) the day of the upload /manual entry. A data upload /manual entry that becomes a 45 or 60 day Forward Lock (within 15 calendar days from (and not including) the date of the data upload /manual entry) will have the lock expired after 15 days from the upload /manual if not converted into an acceptable submission (refer to the Loan Submission Procedure). A data upload /manual entry locked on the 15 th calendar day has only that day to become an acceptable submission. Loan File Not Submitted If an acceptable submission is not received within the required time frame the lock will be expired. 10/10/13 Page 3 of 8
LOCK EXTENSIONS A lock extension must be requested prior to the Lock Expiration date. NOTE: A fifteen (15) day lock is not eligible for rate lock extensions. Refer to the Lock Period section for requirements. Subject to the conditions stated in the paragraph above, rate lock extensions will be allowed as follows: Loans with a lock expiration date equal to or greater than 5 days from the extension request: o 7 calendar days for.120 or 12 bps o 15 calendar days for.250 or 25 bps Loans with a lock expiration date less than 5 days from the extension request: o 3 calendar days for.100 or 10 bps o 7 calendar days for.200 or 20 bps o 15 calendar days for.400 or 40 bps Loans with a status of Docs Out are eligible for a 1 calendar day rate lock extension free of charge. Only one free of charge day applies regardless of multiple extensions. A maximum of 2 extensions will be allowed, not to exceed a total of 30 days Jumbo Products Only (Jumbo and Jumbo Premier) Lock extensions cost.02 or 2 bps per day All extensions are cumulative Extensions may not exceed a total of fifty five (55) calendar days Loans with a status of Docs Out are eligible for a 1 calendar day rate lock extension free of charge. Only one free of charge day applies regardless of multiple extensions. 10/10/13 Page 4 of 8
RE-LOCKS If a customer wishes to relock a previously locked loan that has expired; the relock can only be taken in increments of 15 or 30 days, but may not be longer than the original lock period. A loan can be re-locked within a 7 calendar day period prior to the lock expiration. The price is calculated as follows: The price is determined by comparing the net/final price on the day the loan was originally locked in, to the current day s net/final price Select the worst case scenario price NOTE: A fifteen (15) day lock is not eligible for rate lock extensions. Refer to the Lock Period section for requirements. Jumbo Products only The price is determined by comparing the net/final price on the day the loan was originally locked plus all extension costs, to the current day s net/final price Select the worst case scenario price Add a relock cost of: o Jumbo:.30 or 30 bps for 15 days or.60 or 60 bps for 30 days o Jumbo Premier:.36 or 36 bps for 15 days or.66 or 66 bps for 30 days Re-Lock Process for Expired Locks Locked data uploads/manual entries with lock expirations caused by non-delivery of the acceptable Broker submission can ONLY be relocked when the acceptable submission is received and are subject to the Re-Lock Policy. RATE LOCK CONFIRMATION FORM The Rate Lock Confirmation can be printed via the website by right clicking on the lock confirmation and selecting Print. The Rate Lock Confirmation includes the lock request date/time, lock status, loan program, lock date, lock duration (# of days), lock expiration date and locked rate/price. LOCK EXPIRATIONS A lock period extends from the lock date to the lock expiration date. If the lock expires on a weekend or Lender observed holiday the lock will extend to the next business day at no charge. Refer to the Lock Hours section of this chapter for observed holidays. 10/10/13 Page 5 of 8
LOCK EXPIRATIONS FOR CANCELLED/WITHDRAWN/DENIED LOANS When a loan with a valid lock is cancelled/withdrawn/denied, the expiration date will become equal to the action date. If a cancelled or withdrawn loan is re-submitted and locked, a new loan number must be assigned and: If the lock has been expired less than 30 days, worse case pricing applies (the worse of the original day price or current day price) If the lock has been expired for greater than 30 days, current day pricing applies If a denied loan is re-submitted and locked, a new loan number must be assigned and current day pricing applies. Jumbo Products Only (Jumbo and Jumbo Premier) If a cancelled, withdrawn or denied loan is re-submitted (a new loan number must be assigned) and locked, worse case pricing applies (the worse of the original day price or current day price). PRICE RENEGOTIATIONS In order to be eligible for consideration for renegotiation the following criteria must apply: The market must have improved significantly The Borrower must receive a benefit (e.g. improvement in rate) The renegotiated price will be 50bps worse than the current day price The original lock expiration date will remain in effect The loan must be in Conditional Approval and prior to documents (PTD) conditions must have been signed off by the Underwriter with the exception of the following: Document Request Final signed 1008 (Lender condition) Final AUS (Lender condition) Only one renegotiation per loan Extensions are permitted on renegotiated loans (standard policy applies) Divisional Manager approval is required Jumbo loans and ARMs of all types are not eligible 10/10/13 Page 6 of 8
PROGRAM CHANGES If a loan program request is made after the loan has been locked, the following guidelines apply: The price will be calculated by comparing the price of the desired program on the day the loan was originally locked, to the current day s price for the same lock period and selecting the greater of the two prices. Worse Case Pricing means that the worse of the original price or the current price must be taken. Refer to the following Program Changes Table for specifics: PROGRAM CHANGE TABLE: Switching between the groups is always considered Higher of Pricing. CONVENTIONAL FIXED (Conforming and Non-Conforming): (Longer Term Shorter Term) (Shorter Term Longer Term) Jumbo Jumbo Premier Original Day of Lock Worse case pricing Not allowed unless original lock has been expired at least 30 days ARMS Conforming & Non-Conforming: ARM ARM (Same Term) ARM ARM (Different Term) Original Day of Lock Original Day of Lock GOVERNMENT: FIXED/ARM & FHA/VA 30 yr 20 yr 15 yr, (Longer Term Shorter Term) Original Day of Lock 15 yr 20 yr 30 yr (Shorter Term Longer Term) Worse case pricing Government Conventional Worse case pricing FHA VA Original Day of Lock ARM Fixed Worse case pricing When changing loan types and/or terms, pricing must comply with rules for both product and term. The worse case pricing resulting from application of both rules must be used. Example: 30 year conventional to 15 year conventional From: To: Pricing 30-year fixed rate 15-year fixed rate Original Date of Lock 10/10/13 Page 7 of 8
Example: 30 year conventional to a 15 year FHA Step 1: From: To: Pricing 30-year fixed rate 15-year fixed rate Original Date of Lock Step 2: From: To: Pricing: Conventional Fixed Government Fixed Worse case pricing The rule for Worse case pricing overrides the Original Date of Lock pricing. WEB SITE LOCKING PROCEDURE Brokers are able to request locks on-line through the website. Re-Locks, Lock Extensions and Program Changes for locked loans must be coordinated through the Account Executive or Senior Loan Coordinator. ### 10/10/13 Page 8 of 8