Best Efforts Pricing: Your Responsibilities
Best Efforts pricing is exclusive to MPF Xtra and requires you to have a Best Efforts-specific master commitment.
Determine any 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. LLPAs will be deducted from the loan funding proceeds. There may be instances where the LLPA would result in a credit.
- For LLPAs that apply to all Mortgage Loan types, see Fannie Mae’s Standard LLPA 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 cover both the LLPA requirement and your institution’s profit margin.
Tip: How to read the MPF Price Sheet
Tip: View the MPF Xtra: LLPA Worksheet
- Best efforts indicative pricing is posted to the eMPF website at approximately 8:30 AM CST each business day and updated several times during the day.
- If you would like to receive the MPF daily indicative pricing schedule, please send a request with your contact information (including PFI#) to firstname.lastname@example.org.
- Live pricing is available at the eMPF website between 8:30 AM and 3:30 PM (CST) and can be accessed using the delivery commitment process. Do not confirm the price quote unless you intend to lock the loan.
- There are no overnight price protections.
- The indicative pricing schedules available at the eMPF website show lock terms of 5, 15, 30, 45, 60 and 90 calendar days. The MPF Xtra product allows you to lock for the actual number of days you need in a range of 3 to 90 calendar days (this provides you with a pricing advantage; the pricing is based on the actual number of days you need to lock for).
- Your MPF funding request must occur no less than 2 days prior to the price expiration date, so keep this in mind when selecting your lock term.
- Example:If you plan to sell the loan to MPF on March 15th, you will select March 18th as your lock expiration date. For tracking purposes, the last day to request funds (March 15th) becomes your expiration date. Your loan must be closed and disbursed prior to requesting MPF purchase/funding the loan.
- A premium or discount (also known as the agent fee) will be paid at loan funding based on the pricing you selected when locking your loan.
- If the agent fee is positive (premium), MPF pays you.
- If the agent fee is negative (discount), you owe MPF.
- 15-, 20- and 30-year amortization terms are available. 25-year terms and odd loan terms are not available for Best Efforts delivery commitments.
- High balance loans can only be 15- or 30-year terms (odd terms are not allowed)..
- 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.)
Loans can be locked via the eMPF website between 8:30 AM and 3:30 PM (CST).
- When locking using a best efforts master commitment, you lock a specific borrower and property address.
- Accuracy in providing loan terms, borrower and property information is important. Changes to this information could require you to cancel your existing lock and relock the loan. If the loan is relocked within 30 days, the relocked loan will be subject to worse case pricing.
- Once a loan is locked, you will receive a Delivery Commitment (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 the confirmation for accuracy and immediately contact the MPF Service Center if any inaccuracies are found.
Demo: New Delivery Commitment - MPF Xtra
- 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 lock.
- When a loan is not going to close, contact the service center to cancel the Delivery Commitment.
- If you re-lock the same loan within 30 days of expiration or cancellation (whichever is the earlier), the loan will be subject to worse case pricing.
- If you re-lock the same borrower with a different property address, you must have a new DU case number to avoid worst case pricing.
- If a loan is delivered and determined to be ineligible, it will be subject to a pair-off fee based on worst-case pricing.
- Best Efforts Lock Changes
- At the time of funding (selling the loan to MPF), the lock terms must match the loan terms.
- The interest rate and/or the loan term can be changed without a fee for a best efforts lock.
- The dollar amount can be changed without a fee as long as the lock stays in the same size grid and stays within the same maximum loan amount grid (i.e., conforming vs. high balance).
- Lock changes must be called into the MPF Service Center at 877.463.6673 Option 3.
- The loan will be re-priced based on the new interest rate and/or term using the original price sheet.
- Best Efforts Extensions
- MPF Xtra extensions must be requested by contacting the MPF Service Center, 877.463.6673 Option 3.
- There will always be an extension fee. Extension fees will be calculated and quoted to you by the MPF Service Center. You will have 60 seconds to accept or decline the quote.
- Best Efforts Delivery Commitment may be extended prior to expiration for up to and no more than 30 calendar days.
- You may extend the lock term either one day at a time or multiple days; however, the cumulative extensions cannot exceed a total of 30 calendar days.
- Once this 30 calendar day extension period expires, any subsequent Delivery Commitment requested for the delivery of the identified mortgage will be subject to worst case pricing if the mortgage re-locks within 30 days.
- After 30 days, the current price sheet will be used.
- Extension fees will be charged to your general Demand Deposit Account (DDA) with eAdvantage (your institution's banking site with FHLB Des Moines) on the date the extension is accepted.
- For Closed Mortgages in the funding process:
- If the loan funding does not occur prior to the Best Efforts Delivery Commitment expiration date, the lock will automatically be extended one day at a time until the loan funds. The MPF Xtra guide states that a funding in process will be extended for 5 days, but the actual practice is 1 day at a time.
- If you are requesting funding on the expiration date, contact the service center and get and extension.
- If a lock is cancelled after the loan funding request has been submitted, the lock will be subject to a pair-off fee.
Tip: See how to calculate extension fees.