Originating & Underwriting

Pricing & Locking a Loan

Determine the borrower's interest rate and loan pricing. Lock the loan terms.

The MPF Xtra product offers both Mandatory and Best Efforts Pricing. Your master commitment determines the pricing option chosen by your institution.

• If you would like to receive the MPF daily indicative pricing schedule (first price sheet of the day), simply fill out this form to sign up.

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1. Determine Price Expiration Date

   MPF Xtra Custody files will require pre-funding certification for all loans purchased by MPF. This means immediately upon requesting funds and receipt of the “Funding Request Confirmation", the custody package must be submitted to the MPF Document Custodian. Allow seven business days from the date of the funding request confirmation. The custody file will be reviewed by the Document Custodian and must receive initial certification within the first four days; the next three days allow for data verification and purchase. The loan will not be purchased without initial certification. 

   • When opening a Delivery Commitment, allow seven additional business days for pre-funding certification and loan funding.
   • If locking a loan to request funding on November 29, 2022, allow an additional seven business days and lock through December 08, 2022.

   

2. Determine Loan Level Price Adjustments (LLPAs)

   • LLPAs are assessed based on loan characteristics such as credit score, LTV, loan purpose, occupancy, number of units, product types, etc.
   • For LLPAs applicable to all Mortgage Loan types, see the LLPA Worksheet & Matrix.
   • LLPAs are NOT built into the MPF pricing schedules. When pricing a MPF Xtra loan, you will determine the applicable LLPAs and price up to cover both the LLPA requirement and your institution’s profit margin. An alternate option would be to charge the LLPAs to the borrower as a line item on the loan estimate/closing disclosure, instead of pricing up to cover LLPAs. 
   • If loan characteristics change during the origination process, LLPAs could also change. The actual amount of LLPAs charged will be based on the loan characteristics at the loan funding.
      

   Tip: How to Price an MPF Xtra Loan

   Tip: Understanding Sub Product Pricing

   Tip: Convert MPF Pricing to Par Pricing

3. Access MPF Xtra Pricing

   • Indicative pricing is posted daily to the eMPF website between the hours of 8:30am - 3:30pm CT.
   • MPF Xtra utilizes live pricing. The price schedules available at the eMPF website are indicative pricing. Indicative pricing tells you what the price was at a set point in time. Indicative price schedules are updated 4 times a day (9:30 AM, 11 AM, 2 PM, 3 PM CT).
   • A live price quote may be slightly different from the indicative price sheet and is available using the eMPF Delivery Commitment/Lock process. Once the quote is obtained, you will cancel the quote; only “confirm” the quote if you intend to lock the loan.
   • There is no overnight price protection.
   • The indicative pricing schedules available at the eMPF website show lock terms of 10, 15, 30, 45, 60 and 90 calendar days. These are benchmarks telling you what the price was for that number of days at a point in time.  
     • The MPF Xtra product allows you to lock for the actual number of days you need in a range of 10 to 90 calendar days. 
     • There is a pricing advantage when the pricing is based on the actual number of days you need to lock for (i.e. if you need a 50-day lock, you do not need to lock for 60 days. The pricing will be better on a 50-day lock.)
     • You must request loan funding/purchase from MPF seven (7) business days prior to price expiration. Consider this when determining your lock expiration date.
       • Example: If you will have the file back from the title company and ready to sell to MPF on Tuesday, February 15th, you will want to lock your loan through Thursday, February 24th.
     • The price sheet and lock confirmation both provide the last date to request funds and the commitment expiration date. For your tracking purposes, track the last day to request funds as your loan must be closed & disbursed by this day to allow you the seven business days needed when requesting funds. 
   • Note rates are quoted in 1/8's.
   • Agent fee represents premium or discount payable on a loan funding. 
     • Positive price is a premium to the PFI and will be paid at purchase. 
     • Negative price is a discount and will be deducted at purchase. 
   • High balance loans can only be 15- or 30-year terms; no odd terms allowed for high balance (a high balance loan is a loan in an area of the country having a high cost of housing (Boston, New York, California, Washington, D.C., etc.). See Exhibit N of the MPF Guides for a list of high balances counties sorted by state).

   Mandatory and Best Efforts Pricing

   • Information Exclusive to Mandatory Pricing

     Mandatory Lock Terms

     • You will not lock a specific borrower or property address. You will lock a dollar amount, loan term, and interest rate for a lock period from 10-90 calendar days. 
     • A Delivery Commitment can be for one loan or multiple loans. If delivering multiple loans into one DC (lock), use the same DC number for all loans. 
     • Loans are priced in 10-, 15-, 20- and 30-year fixed-rate terms. 
       • Ten year pricing is only available by contacting the MPF Service Center at #877.463.6673 (option 1 or 2 to obtain a 10-year price quote). 
       • Odd amortization terms are allowed:
         • 85-120 month term priced into a 10-year term
         • 121-180 month term priced at a 15-year term
         • 181-240 month term priced at a 20-year term
         • 241-360 month term priced at a 30- year term

     Loan Amount Tolerances

     • When the loan amount you deliver falls within the allowable tolerance, you are considered meeting your mandatory delivery. The MPF Xtra tolerance is plus or minus by the greater of $10,000 or 2.5% of the original delivery commitment amount, not to exceed the maximum loan amount limits for both conforming and high balance loans.
     • When a loan is delivered outside the allowable tolerances, any applicable fees will be calculated on the full amount the loan is under or over the original delivery commitment. These fees could result in a debit or credit to your institution's eAdvantage DDA account based on bond market movement. 
       • Example: A loan locked at $300,000 is delivered at $285,000. Based on the tolerance rule, if the loan was funded between $290,000 and $310,000, there would not be a fee. In this example, the pair-off fee will be calculated on $15,000, the full amount not delivered. 
       •  When using sub-product pricing, you may not have the ability to use the $10,000 or 2.5% tolerance. Example: locked in at a sub-product price of $150,000 maximum, you could not use the tolerance rule to increase the loan amount. To increase above $150,000, you would have to pair-off and relock. 

     Tip: See Pair-Off Examples

     Xtra Mandatory Interest Rate Tolerances

     • The interest rate can be changed and can vary by as much as .50 bps. The variance will be based on the Mortgage Backed Security requirements for each note rate. To simplify this, the allowable interest rate range for each DC (lock) will be shown on the DC Confirmation. 
     • The interest rate tolerance allowance is useful when you need to substitute a different loan or loans into an existing mandatory delivery commitment.

     Tip: Example of Interest Rate Tolerances

     Lock Extensions

     • A DC/lock can be extended no later than 3:30pm CT on the day of expiration. 
     • There will always be an extension fee regardless of market movement. Extension fees will be calculated and quoted within the eMPF website. 
     • The MPF funding request must occur with not less than 7 business days prior to expiration. This may require you to obtain an extension. 
     • If the loan funding does not occur within 3 business days of the price expiration date, an extension will be needed.
     • You may extend the lock term either one day at a time or for multiple days; however, the cumulative extensions cannot exceed a total of 30 calendar days. After 30 days, the current price sheet will be used. 
     • To obtain an extension, use the eMPF website; select "Transactions", "Delivery Commitment", then "Extension". 
     • Complete the DC extension screen; review the screen for accuracy. If you are satisfied with the information, click the submit button. 
     • The eMPF website will provide an extension fee quote with a 55 second count down bar. You can "Accept Fee & Extend" or "Cancel" the transaction. 
     • With an “Accept Fee & Extend” selection, extension fees will be charged to your general Demand Deposit Account (DDA) in eAdvantage (your institution's banking site with FHLB Des Moines) on the date the extension is accepted.

     Tip: See How to Calculate Extension Fees

     Loan Amount Reductions Prior to Expiration

     • A delivery commitment may be reduced prior to expiration. (You would only lower the amount if the new dollar amount is below tolerance.)
     • Pair-off fees are charged on a mandatory delivery commitment when the amount is reduced below the allowable tolerance.
     • Loan amount reductions are available via the eMPF website Transaction tab/ Delivery Commitment/ Reduce.
     • eMPF will compare the prices at the time the lock was issued to the prices at the time of pair-off (based on the days left in the DC). The eMPF website will determine if a pair-off fee will be due. 
     • Depending on market movement, a pair-off will result in a debit or a credit to your account. 
     • The pair-off fee will be based on the full dollar amount of the change.  
     • Pair-off fees will be calculated and quoted via the eMPF Delivery Commitment screen once submitted. You will have 60 seconds to accept the quote. 
       • Reduction fees will be charged to your general DDA within eAdvantage on the date the reduction fee is accepted by the PFI. 
       • You will want to have sufficient funds in your general DDA to cover this fee. 
       • Once a DC (lock) is reduced, the tolerance rule no longer applies and the new tolerance becomes +/- $50.
         • You will want to be as close as possible when you reduce the Delivery Commitment. 

           Tip: See Loan Amount Reduction Example

     Over-Delivery / Price Adjustment Fee

     • A DC cannot be increased. 
     • Multiple DCs cannot be added together for one loan.  
     • You can over deliver an MPF Xtra DC.
       • The maximum over-delivery amount is 25% of the original DC amount, up to (but not to exceed) the maximum allowable conforming loan limits, or if used the high balance maximum loan limits. 
       • On a DC of $150,000, the maximum over-delivery is an additional $37,500, which is 25% of the $150,000 for a total of $187,500. When the amount delivered exceeds the allowable tolerance (which is the greater of $10,000 or 2.5%), the pair-off fee will be charged on the full amount the delivery is above the original DC amount. 
     • The amount charged to your general DDA account will be based on the last price sheet of the day on the day the loan is purchased by MPF.
     • Ensure you have sufficient funds in your general DDA to cover this fee.

     Tip: See Over-Delivery / Price Adjustment Fee Examples

     Canceling a Delivery Commitment

     • When a loan isn’t going to close, there are three options:
       • You can substitute a different loan or multiple loans into the DC.
         • If the loan amount is smaller, consider reducing the DC amount prior to selling the loan/loans to MPF.
         • Note: If there is a chance the loan could be saved and close in the future, the loan will be subject to worse case pricing if the loan is cancelled or expires and is relocked within 30 days of whichever came first, the cancelation date or expiration date. After 30 days, the current price sheet will be used.
       • The DC can be reduced by the full amount of the DC, resulting in a zero DC amount. If there will be a pair-off fee charged, it will be calculated on the full amount of change using the current price at the time of the reduction transaction.
       • Let the DC expire. When a DC expires, the pair-off fee will be calculated on the difference between the original DC amount and the amount sold to MPF. The fee will be calculated based on the last price sheet of the day.

   • Information Exclusive to Best Efforts Pricing

     Best Efforts Lock Terms

     • When locking using a Best Efforts (BE) Master Commitment (MC), you will lock a specific borrower and property address.
     • Loans are priced in 10-, 15-, 20- and 30-year fixed-rate terms. 
       • Ten-year pricing is only available by contacting the MPF Service Center at #877.463.6673 (option 1 or 2 to obtain a 10 year price quote).
       • Odd loan terms are not allowed (e.g. a 25-year term is not available for a BE DC lock).

     Best Efforts Basics

     • A Best Efforts lock cannot be converted to a mandatory lock nor can a mandatory lock be converted to best efforts lock.
     • Best Effort locks are borrower and property specific – substitutions are not allowed.
     • Only one loan may be delivered under each BE DC/lock.
     • When a loan is not going to close, contact the service center to cancel the Delivery Commitment.
     • Accuracy in providing borrowers and property information is important. Changes to this information could require you to cancel your existing Delivery Commitment (DC/lock) and relock the loan. If the loan is relocked within 30 days of whichever comes first- cancelation or expiration- the relocked loan will be subject to worst case pricing.
     • Worst case pricing could also include an extension fee if you extend the delivery date past the date of the original DC.
     • If you relock the same borrower with a different property address, you must have a new DU case number to avoid worst case pricing.
     • Once a BE loan closes the loan automatically converts to a mandatory delivery.
     • If a loan is delivered and determined to be ineligible, it will be subject to a pair-off fee.
       • Example: Loan with secondary financing is sold to MPF. A quality control audit finds the secondary financing was not disclosed in the loan data provided to MPF at funding, and the TLTV exceeds the MPF limits. MPF will require a repurchase of the loan, which will include a pair-off fee and recapture of any agent fee. The pair-off fee will be based on bond market movement. 

     Best Efforts Delivery Commitment Changes

     • At the time of funding (selling the loan to MPF), the lock terms must match the loan terms. 
     • The dollar amount can be changed without a fee as long as the dollar amount stays within the same maximum loan amount grid (i.e. conforming vs. high balance). For high balance counties, see exhibit "N" of the MPF Guides. 
     • The interest rate and/or the loan term can be changed without a fee for a BE DC (lock). 
     • DC (lock) changes must be called into the MPF Service Center at #877.463.6673 (option 2)), no later than the day prior to requesting the loan to purchased by MPF. 
     • The loan will be repriced based on the new loan mount, interest rate and/or term using the original price sheet.

     Best Efforts Extensions

     • A DC/lock can be extended no later than 3:30pm CT on the day of expiration. 
     • There will always be an extension fee regardless of market movement. Extension fees will be calculated and quoted within the eMPF website.
     • The MPF funding request must occur with not less than 7 business days prior to expiration. This may require you to obtain an extension. 
     • If the loan funding does not occur within 3 business days of the price expiration date, an extension will be needed.
     • You may extend the lock term either one day at a time or for multiple days; however, the cumulative extensions cannot exceed a total of 30 calendar days.
       • Once this 30 calendar day extension period expires, any subsequent DC requested for the delivery of the identified mortgage will be subject to worst case pricing if the mortgage re-locks within 30 days of cancellation or expiration.
       •  After 30 days, the current price sheet will be used. 
     • To obtain an extension, use the eMPF website; select "Transactions", "Delivery Commitment", then "Extension". 
     • Complete the DC extension screen; review the screen for accuracy. If you are satisfied with the information, click the submit button. 
     • The eMPF website will provide an extension fee quote with a 55 second count down bar. You can "Accept Fee & Extend" or "Cancel" the transaction. 
     • With an “Accept Fee & Extend” selection, extension fees will be charged to your general Demand Deposit Account (DDA) in eAdvantage (your institution's banking site with FHLB Des Moines) on the date the extension is accepted.

     Tip: See how to calculate extension fees.

     Best Efforts Delivery Commitment Cancelation

     • When a loan isn’t going to close, contact the MPF Service Center and cancel the delivery commitment.

4. Lock the Loan

   • Watch step by step instructions in the demo.
   • Lock the loan amount, interest rate and term for a period of time ranging from 10 to 90 calendar days.  
   • Review the Delivery Commitment (DC) information you input prior to confirming. 
   • Once a DC is locked, you can print the confirmation. The individual creating the DC will receive an email confirmation. Using the dropdown in the eMPF screen, the confirmation can also be emailed to others who have DC authority. 

     View Demo Video

   • Once a loan is locked, you will receive a DC confirmation, which will contain a DC number.
     • The DC number will be needed in the funding process, so save the number for future use. We recommend printing a copy of the DC confirmation to keep in the loan file.
     • Review each confirmation for accuracy and immediately contact the MPF Service Center if inaccuracies are found or if you need to cancel the lock. 
   • If a lock is cancelled after the loan funding request has been submitted, the DC will be subject to a pair-off fee. 
   • You will want to have funds in your general DDA to cover miscellaneous fees, such as extension fees.