This was a cash out refinance loan request for a repeat client. His goal was to get locked in at the lowest rate while cashing out as much as possible. Client was positioning himself ahead of what felt like a changing real estate market.
We initially started this loan under Freddie Mac small balance loan program and we were at a 5 year fixed at 3.3% rate and with the requested cash out. We were at the letter of interest stage and borrower had money up for good faith deposit and it was all green light a go. Then coronavirus hit, lender began stalling and ultimately they pulled out of the deal and the market, fortunately they returned all funds to the borrower so he had no money out. Everywhere at this time lenders were changing their guidelines and tightening up or pulling out of the market.
The deal was dead and looked like all was lost. Then I spoke with the borrower about his priority and it was the cash out, then rate and terms. I was able to structure a good 3 year program with a 2, 1 prepay. This allowed the client the ability to get the funds they wanted and get locked into a loan under 4%. We were all on pins and needles during the transaction since the COVID crisis was just getting worse and we didn't want anything to go sideways on the deal. We closed and client was happy.