The Rate Hold That Expired
A lender's 120-day rate hold on Nadia's file expired on March 1. Her purchase closes April 15. On February 20, Nadia's broker, Owen, requested an extension. The lender confirmed by email that the rate would be 'honoured through closing' but did not issue a new commitment. On March 10, rates rose 0.75%. The lender now says the email was an informal courtesy and the current rate applies, which adds about $210 per month to Nadia's payment. Nadia has a signed purchase agreement and a firm closing date. Owen has the February 20 email but no formal extension document. Nadia is threatening to complain to the regulator and says Owen 'promised' the original rate.
1. Assess the strength of Nadia's position and Owen's exposure.
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Nadia's position: The February 20 email saying the rate would be 'honoured through closing' is written evidence of the lender's representation. Whether it is binding depends on its terms and the lender's authority to vary the commitment. An email from an authorized lender representative confirming the rate through closing is arguably a commitment, even if informal; the lender's later characterization as a 'courtesy' is a position, not a fact. Nadia has a reasonable argument that the original rate applies, and a regulator complaint would focus on whether the lender honoured its written representation.
Owen's exposure: Owen told Nadia the rate was held based on the email. If the email was ambiguous, Owen should have obtained a formal extension. His exposure is whether he misrepresented the commitment. If he conveyed the email accurately and pursued a formal extension, his conduct is defensible; if he promised more than the email said, he has a problem.
Key point: The written email is the pivot. Owen should preserve it and not concede the higher rate without challenge.
2. What steps should Owen take now to protect Nadia and himself?
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- Preserve and produce the email - send it to the lender's escalation or complaints team and request written confirmation that the rate is honoured through closing.
- Escalate formally - file a written complaint with the lender citing the February 20 representation, and request a response before closing.
- Quantify the gap - document the ~$210/month difference and the total cost over the term so Nadia understands what is at stake.
- Prepare a fallback - if the lender holds firm, model alternatives: a different lender (if time permits), a shorter term, or absorbing the increase. Closing is April 15, so time is short.
- Be transparent with Nadia - explain what was said, what the email says, and what he is doing. Do not repeat the word 'promised' if the email does not support it; accuracy protects both of them.
- Document everything - the timeline, the email, the escalation, and Nadia's instructions.
If the lender refuses, Nadia's regulator complaint is legitimate, and Owen should support her factual account rather than discourage it.