Understanding Subproduct Pricing

Subproduct Pricing

Subproduct pricing provides a pricing advantage based on the loan size. Analysis of loan data has shown that lower loan amounts have a slower pre-payment speed. From a pricing standpoint, some investors are willing to pay a better price for loans that will stay on their books longer.  

Both MPF Xtra Mandatory and Best Efforts have the advantage of subproduct pricing.

Mandatory – If it becomes necessary to cancel a Delivery Commitment (DC) and lock at a higher subproduct maximum, the DC could be subject to a pair-off fee. You can deliver a lower loan amount, and as long as you are within tolerance, there will not be a pair-off fee. If outside of tolerance, there could be a fee (or credit) and it will be based on the full amount your DC has changed. 

Best Efforts – You may change the loan amount, term or interest rate without incurring a fee, as long as you stay in the same maximum loan amount grid (conforming vs. high balance loan). Be sure to contact the Service Center (within a day of requesting funds) to make any necessary changes so the terms of the DC and the actual loan match at the time you are requesting funds.

Xtra Pricing

Subproduct Pricing