Bank rejected locked in rate?

[Amythyst]

If the rate was not locked in and signed off on, then there isn't anything he can do except buy the rate down.  The percentage they quote you on those estimates is just an estimate at the time that they do the write up.  I was quoted 3.25% when I originally did all my paperwork but I had to lock in at 3.75% ... that's just how it goes.   

[Hevj1119]

Soooo... calling the local news stations and newspapers won't change anything, eh?

[Hoya08]

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@Hevj1119 wrote:

Soooo... calling the local news stations and newspapers won't change anything, eh?

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Nope, calling the local news won't change anything.  They'll more than likely ignore the complaint since the rate on the GFE and all paperwork prior to any documentation to lock in the rate are just estimates.  The estimates are to give you an idea of what your payments will be if you were to purchase at that moment.  Your friend is required to lock-in the rate and usually there are documents to state when this occurs.

As already mentioned, buyers usually lock-in 60-days prior to closing.  If your friends did lock-in, how long ago did they do this?  It could have been a verbal authorization.  However, they'd have to read the fine print to see if the lock-in rate automatically expires if closing does not occur as planned.

[Hevj1119]

I think reality is my friend was misled by his LO and never truly locked in.  He signed what he thought were lock in documents, but in fact clearly state the rate is being floated.  

Lesson learned to read what you sign I guess!

[pdog661]

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@Hevj1119 wrote:
My colleague just sent me this message: I got a disturbing call from my lender. He told me the interest rates had spiked significantly enough since I locked in my rate that the bank decided to reject the rate I was promised.

Can they do that?

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Once locked into a rate a buyer has that rate until the time frame expires - normally 60 days.  

If the buyer goes beyond this timeframe, then they can request to extend the locked in rate.   The bank then has the right to accept or reject the extension.  I would guess that the extension was rejected.