MPF Xtra® Training:Specialized Loan Servicing

Originating & Underwriting

Pricing & Locking a Loan

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

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.

A live price quote is available using the eMPF delivery commitment/locking process. Once the quote is obtained, you will cancel the quote; only “confirm” the quote if you intend to lock the loan.

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

  1. 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. LLPAs will be deducted from the loan funding proceeds. 
    • 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 to cover both the LLPA requirement and your institution’s profit margin. 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 a MPF Xtra Loan

    Tip: Understanding Sub Product Pricing

  2. Review Specialized Loan Servicing's Servicing Released Premium (SRP) Schedule

    • The SRP represents the price paid to the PFI by SLS for the servicing rights for the PFI's loan.
    • The SLS SRP schedule is located on the Pricing dropdown tab within the eMPF website and is subject to change to any time during the day. 
      • Review the SRP schedule for applicable pricing adjustments. 
      • The SRP paid will be the SRP in effect at the time the DC is issued. 
    • The SRP is in addition to the MPF price and will be included with the MPF funding of the loan.
       

    Tip: Find out how SRP is calculated

    Tip: SRP Schedule

  3. Access MPF Xtra Pricing

    • Indicative pricing is posted daily to the eMPF website at approximately 8:30 AM CST.
    • 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. 
    • The indicative pricing available at the eMPF website shows lock terms of 5, 15, 30, 45, 60 and 90 calendar days. These are bench marks telling you what the price was for that number of days at a point in time. 
      • The Xtra product allows you to lock for the actual number of days you need in a range of 3 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 by MPF 2 days prior to price expiration. Be sure to take this into consideration when determining your lock expiration date (i.e. you know you will have the file back from the title company and ready to sell to MPF on Tuesday the 15th. When locking, you will want to lock through Thursday the 17th.)
      • The price sheet and the 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 two days needed when requesting funds. 
    • High balance loans can only be 15- or 30- year terms; no odd terms allowed for high balance (a high balances 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

      • When using a mandatory master commitment, you will not lock a specific borrower or property address. You will lock a dollar amount, loan term, interest rate, and lock period between 3-90 calendar days. If delivering multiple loans into one DC, use the same DC number for all loans used to fill the DC. 

        • Loans are priced in 10, 15, 20 and 30 year fixed rate terms. 
          • Ten year pricing is available- contact 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 (SLS minimum loan term 120)
            • 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 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 delivered. 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 $100,000 is delivered at $85,000. Based on the tolerance rule, if the loan was funded between $90,000 and $110,000, there would have been no fee. In this example, the pair-off fee will be calculated on $15,000, the full amount not delivered.  

        Tip: See Pair-Off examples

        Interest Rate Tolerances
        • The interest rate can change and vary by as much as a half a percent. The variance will be based on the Mortgage Backed Security requirements for each rate locked. TO simplify this, the allowable interest rate range for each DC will be shown on the DC/lock confirmation
        • The tolerance allowances are useful when you need to substitute a different loan or loans into an existing mandatory delivery commitment. This example will use the DC report.
          • If you are unable to deliver the intended loan, the tolerance rule allows you the flexibility to substitute one or multiple loans into the existing Delivery Commitment (DC)/lock. There is also flexibility in the interest rate you deliver. The available interest rate range and pricing will show on your DC confirmation
          • When you deliver multiple loans into one DC/lock, you will use the same DC number for the funding of each loan.
        Loan Amount Reductions
        • Pair-off fees are charged on a mandatory delivery commitment when the amount delivered is below the allowable tolerance for the committed dollar amount.
        • Loan amount reductions are available vie 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. 
        • When the amount delivered falls outside of the lock tolerance, the pair-off fee will be based on the full dollar amount that the delivery is actually below the original locked amount. 
        • Pair-off fees will be calculated and quoted via the eMPF Delivery Commitment screen once submitted. You will have 60 seconds to accept of decline 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 Examples

      • When locking using a Best Efforts (BE) Master Commitment (MC), you lock a specific borrower and property address. 

        • 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- cancellation or expiration- the relocked loan will be subject to worse case pricing
        • Loans are priced in 10, 15, 20 and 30 year fixed rate terms. 
        • Odd loan terms are not available (there is no 25 year term for a BE DC).
        • 10 year pricing is available. Contact the MPF Service Center at #877.463.6673 (select option 1 or 2 for 10 year price quotes.  
        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.
        • If you re-lock the same loan within 30 days of expiration or cancellation, whichever is the earlier, the 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 re-lock 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 re-priced based on the new loan mount, interest rate and/or term using the original price sheet.
        • No substitutions are allowed. 

  4. Loan Lock

    • Delivery Commitments are taken down via the eMPF website between 8:30 AM and 3:30 PM CST. Pricing expires at 3:30 PM CST; there is no overnight price protection. 
    • Follow the instructions in the demo.
    • Lock the loan amount, interest rate and term for a period of time from 3-90 days. 
    • Proof the DC information you input prior to confirming. 
    • Once a DC is taken out, you can print the confirmation for the loan file. The individual logged in will receive an email with the confirmation and using the drop down, the confirmation can be emailed to others who have DC authority. 

    Demo: New Delivery Commitment - MPF Xtra

    Demo: New Delivery Commitment - MPF Xtraplay video

    • Once a loan is locked, you will receive a Delivery Commitment (DC) confirmation, which will contain a DC number.
      • The Delivery Commitment (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. 
    • Lock extensions are available via the eMPF website using the Transaction/Delivery Commitment screen up to 3:30 PM CST.
      • You may extend the lock term for one dat at a time or multiple days; however, an extension cannot exceed a total of 30 calendar days. 
      • There will always be a fee charged for an extension. Extension fees will be shown on the extension screen of eMPF. You will have 60 seconds to accept or decline the quote. 
      • Extension fees accepted will be charged to your general Demand Deposit Account (DDA) within eAdvantage (your institution's banking site with FHLB Des Moines) on the date the extension is accepted. 
      • You will want to have funds in your general DDA to cover the extension fee.