What is a lock-jumper?


A lock-jumper is a borrower who locks on a loan with a certain interest rate, the loan is underwritten and the borrower approved. However, the market rates go down and just before the loan is closed, the client calls in and says he's walking off if the broker does not give him a lower rate. The broker will lose in commission rate if they accept the lower rates.

However, with a lock-jumper client and without clear lock jumping rules and fees brokers usually do not stand a chance but to take the new rate as requested by the client since often the underwritten loans are already sold to a wholesale lender before closing and a fine will be incurred to the broker if they back off.

Needless to say, lock-jumpers are not brokers' favorite borrowers but often brokers agree to take the risk of lock jumping by not including clearly stated lock jumping rules in the agreement afraid that borrowers would go to lenders who do not have any.

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