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Float Down Policy

When market conditions improve resulting in better pricing at another lender in Morty’s network, Morty will allow a freeone-time float-down opportunity to switch a clients locked loan application to another lender. The situation must meet the guidelines below.

Guidelines:

  • The switch must result in a minimum 0.125% improvement in rate without an increase in closing costs (i.e., no increase in points or no decrease in credits) at the new lender.
  • The anticipated closing date is between 21 and 60 days away.
  • Current application is in ‘Conditionally Approved’ or ‘Submitted to Underwriting’ status.
  • FHA, VA and USDA loans are ineligible for a float-down.
  • If an appraisal has already been completed, the new lender must allow and accept appraisal transfers. Appraisals that are subject to completion, as seen with New Construction properties, cannot be transferred under any circumstance.

Notes to Consider:

  • Floating down requires Morty to switch the current application to a new lender and restart underwriting. This means the client will receive an initial disclosure package from the new lender for signature. Failure to sign the new disclosures in a timely manner may result in delays. 
  • Depending on the original lender, the client may be eligible to float-down within that lender which means Morty would not need to switch to a new lender.
  • New construction properties require special consideration due to indefinite closing dates.
  • Do not use RUDI to quote available float-down options to your client. Your PSM will determine the available float down options upon submitting your request

Submit a Float-Down Request

  • After reviewing the guidelines and notes above, submit your float down request by sending an email to loan-applications@morty.com . Make sure to CC your PSM and include the borrowers name and ‘Float-Down Request’ as the subject line, along with the following information in the email:
    • Current Lender
    • Date of Original Lock
    • Closing Date
    • Underwriting Status
    • Property Under Construction? (yes or no)
    • Appraisal Complete? (yes or no)
      • If Yes, is the Appraisal “As is?” (yes or no):
  • Upon submitting the request, your PSM will review and determine if your client meets the guidelines to float-down and will present options via email
  • Allow 2-4 hours for your PSM to complete the request

Customer Facing Float-Down Policy

Upon request, Morty will review your locked terms to determine if the latest changes in the market result in improved pricing that makes you eligible for our float-down option.

If interest rates improve at another lender in our network by 0.125% or more than your current locked rate without an increase in closing costs, we can switch you to that lender at no additional cost. This is allowed once per transaction and is also contingent on the following: (1) the anticipated closing date is greater than 21 days away and less than 60 days away (2) if an appraisal transfer is required, we will need to obtain confirmation from the new lender that it is acceptable before switching.

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