Commitment Delivery Variance
Best Efforts Commitments
Best Efforts commitments offer a delivery variance of the lesser of plus or minus (±) ten percent (10%) or plus or minus (±) thirty-five thousand dollars ($35,000) of the original Mortgage Loan amount.
A Mortgage Loan amount change to a Mortgage Loan in a Best Efforts commitment that results in a net Mortgage Loan amount that breaches the allowed delivery variance will subject the commitment to reprice based on the following conditions and calculations:
Under-Delivery, Improving Market
Existing Final Price - [((Current Rate Sheet Date/Time Final Price – Existing Final Price) * (Commitment Amount - Delivery Variance Amount - New Loan Amount)) / New Loan Amount]
Under-Delivery, Declining Market
Existing Base Price applies to reduced Mortgage Loan amount.
Over-Delivery, Improving Market
Existing Base Price applies to existing and additional Mortgage Loan amount.
Over-Delivery, Declining Market
Existing Final Price + [((Current Rate Sheet Date/Time Final Price – Existing Final Price) * (New Loan Amount - Commitment Amount - Delivery Variance Amount)) / New Loan Amount]
PennyMac actively monitors Mortgage Loan amount changes to Best Efforts commitments. If PennyMac determines a Seller excessively updates Mortgage Loan amounts, PennyMac may modify price based on a more punitive calculation. For example, if a Seller delivers over the variance in a declining market, PennyMac may apply a worse-of price calculation to the entire Mortgage Loan amount, rather than just the overage.
Note: PennyMac resets the commitment delivery variance at relock.