A rate lock agreement expires on Friday, but the lender's offices are closed due to a federal holiday. The borrower's attorney calls Monday morning requesting the closing documents. What is the standard industry practice?
Correct Answer
A) The rate lock is automatically extended through the next business day
Standard industry practice and most rate lock agreements include provisions that automatically extend the lock period through the next business day when the expiration date falls on a weekend or federal holiday. This prevents borrowers from being penalized for circumstances beyond their control and ensures fair treatment in the rate lock process.
Why This Is the Correct Answer
Standard industry practice and most rate lock agreements include provisions that automatically extend the lock period through the next business day when the expiration date falls on a weekend or federal holiday. This prevents borrowers from being penalized for circumstances beyond their control and ensures fair treatment in the rate lock process.
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