Rate-Lock Fees Seen Getting Foothold
(AmericanBanker) Some lenders are beginning to charge rate-lock fees to both consumers and loan brokers, according to industry participants.
One mortgage executive, requesting anonymity, said his current servicer, JPMorgan Chase & Co. wanted to charge him 50 basis points to lock in a low rate for his refinancings. He passed on the offer.
A call to JPMorgan Chase’s 800 number by National Mortgage News got a representative, after a 10-minute wait, who would not quote any loan information unless the caller filled out a credit report.
Bank of America Corp. and Wells Fargo & Co. said they do not currently charge lock-in fees to retail applicants.
Marc Savitt the president of the National Association of Mortgage Brokers, said he has heard stories about wholesalers charging brokers a fee to lock in rates but has seen nothing in print.
Brokers, in turn, would pass on that fee to consumers. Mr. Savitt added that lock-in fees would drive up closing costs, making it “more difficult, if not impossible, for some consumers to become homeowners.”
A mortgage adviser said that in years past some brokers would lock in rates with multiple lenders, then pick the lender with the lowest rate. Wholesalers are getting tired of the practice because “it hurts their pull-through rate,” this adviser said.