Origination ActivitiesQuestion 242 of 400
A borrower's rate lock expires two days before the scheduled closing due to processing delays. What is the most common consequence?
a.The loan is automatically canceled
b.The borrower keeps the original rate indefinitely with no action
c.The lender must pay the borrower a penalty
d.The lender may extend the lock (sometimes for a fee) or re-lock at current market rates
Explanation
When a lock expires before closing, the lender typically offers a lock extension, sometimes for a fee, or re-locks at prevailing market rates, which may be higher or lower. The loan is not automatically canceled, and there is generally no automatic penalty paid to the borrower.
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