First Funding Blog

Why should the lock not expire on same day as closing?

Every loan may be different, but virtually every investor’s loan delivery requirements specify that the loan must be delivered (not just sent) and/or uploaded (not just scanned) by the date on which a rate lock expires. Thereafter, various grace periods may apply in order to provide adequate time for post-closing purchase condition resolution. It requires more than one day to; get the originally executed note back from the settlement agent after closing, prepare and attach the Bailee Letter, transmit and confirm receipt of the originally executed note to the secondary market investor. Consequently, FirstFunding established a rate lock expiration policy that has been emulated amongst many warehouse lenders. FirstFunding’s rate lock expiration policy has prevented many of its customers from extraordinary penalties by Secondary Market Mortgage Investors due to expired locks.