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:
- 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 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
- 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 to you within the eMPF website. You will have 60 seconds to accept or decline the quote.
- 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 a lock expires, you may relock using current pricing.
- Using the eMPF website, select "Transactions", "Delivery Commitment", then "Extension".
- You will 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 60 second count down bar. You can "Accept Fee & Extend" or "Cancel" the transaction.
- If accepted, the 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.
- The 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.
- If a lock is cancelled after the loan funding request has been submitted, the DC will be subject to a pair-off fee.
Loan Amount Reductions Prior to Expiration
- A delivery commitment may be reduced prior to expiration.
- 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.
- When the amount delivered falls outside of the lock tolerance, 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 Examples
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