That time our loan servicer dropped the ball on a rate lock extension

Honestly, last month we had a $4.2 million deal in Austin almost fall apart because our servicer forgot to extend the rate lock by three days. We had all the docs ready, the borrower was on board, but they just sat on the request until the lock expired. Cost us an extra 15 basis points to get it back and I had to explain to the investor why our margin got squeezed. Has anyone else had to fight their servicer over something this basic?

2 comments

2 Comments

caseyl184d ago

Man, 15 basis points on a $4.2 million deal? That's like $63,000 just gone because somebody hit the wrong button. I would've been livid. The whole point of a rate lock extension is to protect the margin, and they just let it slide for three days? That's not even a weekend, that's like a Tuesday afternoon. Servicers act like they're doing you a favor when they finally respond, but they're the ones getting paid to handle this stuff. Honestly, your investor probably should've been more understanding, but I get why you had to eat it. That kind of mistake makes you want to double check every single document yourself, even the ones they're supposed to own.

jamiew833d ago

Hmm, I hear you, but I actually see it a little different. In my experience, sometimes eating the 15 basis points is the cheaper move than fighting it. You can burn way more than $63k in man hours, legal back and forth, and relationship capital trying to claw it back. Caseyl, I've seen lenders take a hit like that just to keep the investor happy on the next deal, and honestly, that goodwill pays off down the road. Plus, those servicers, they've got their own internal deadlines and error reports, and if you push too hard they'll just drag their feet on your next lock. Take it from someone who's been on both sides, sometimes you pick your battles and eat the loss just to keep the pipeline moving.