Subproduct Pricing

Why Use 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. To access the subproduct pricing advantage, you must select the associated subproduct price category from the dropdown in the delivery commitment process. 

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

Mandatory – The amount delivered into subproduct pricing cannot exceed the subproduct maximum loan amount. If it becomes necessary to cancel a Delivery Commitment (DC) and lock at a higher subproduct maximum, the cancelled 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. When a DC is cancelled prior to price expiration, the fee will be based on the full amount of change. When a DC is allowed to expire the fee will be given the benefit of tolerance. If you lock into subproduct pricing and deliver an amount that would fit into a lower subproduct max, you will not receive the pricing advantage of the lower delivery amount. You will receive the price for the subproduct price based on your actual DC.

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.