float-down

Among the benefits were the waiving of underwriting, processing, and document preparation fees, as well as a free "float-down" in case rates fell.

Mozilo PaysRecord Penalty For Securities Fraud Agustino Fontevecchia 2010

Among the benefits were the waiving of underwriting, processing, and document preparation fees, as well as a free "float-down" in case rates fell.

Mozilo PaysRecord Penalty For Securities Fraud Agustino Fontevecchia 2010

But then the documentation for Dodd's loan application showed that there was no rate lock, ergo, there was no float-down.

David Fiderer: How Reporters Provide Cover for Darrell Issa's Lies on the Countrywide "Scandal" 2010

Since a person refinancing his mortgage has the option of walking away from the closing if rates fall after the date of his application, float-down fees are very competitive.

David Fiderer: How Reporters Provide Cover for Darrell Issa's Lies on the Countrywide "Scandal" 2010

Since a person refinancing his mortgage has the option of walking away from the closing if rates fall after the date of his application, float-down fees are very competitive.

David Fiderer: How Reporters Provide Cover for Darrell Issa's Lies on the Countrywide "Scandal" David Fiderer 2010

So unless there is documentation to show what the float-down fee was waived, and there was none, then there was no easy way to establish the value of such a benefit.

David Fiderer: How Reporters Provide Cover for Darrell Issa's Lies on the Countrywide "Scandal" 2010

As for the float-down, Dodd's accuser valued the free float-down at $75,000, based on the interest savings spread over 30 years.

David Fiderer: How Reporters Provide Cover for Darrell Issa's Lies on the Countrywide "Scandal" 2010

Or the other possibility is that the price of a float-down may be embedded within the locked-in rate.

David Fiderer: How Reporters Provide Cover for Darrell Issa's Lies on the Countrywide "Scandal" 2010

Float-downs are priced as upfront fees and the going rate for a float-down on the type of 5-year and 10-year hybrid loan taken out by Dodd is maybe 1/8% (i.e. under $1000).

David Fiderer: How Reporters Provide Cover for Darrell Issa's Lies on the Countrywide "Scandal" 2010

A float-down entitles a borrower to take the lower of the locked-in rate or the current rate, which may have declined if the underlying treasury index declined.

David Fiderer: How Reporters Provide Cover for Darrell Issa's Lies on the Countrywide "Scandal" 2010