Worse case pricing is a functionality in Product Change Request and Profile Change Request. When it is enabled, Optimal Blue will automatically compare a product’s pricing grid from the time of lock to the product’s pricing grid with current pricing. Optimal Blue will look at the price for each rate and lock period in the two grids and pick the worse (lower) price. Then, that single worse case grid will be displayed in the change request search results. The majority of the time, the product’s entire original or current grid will be the “worse case,” because generally when the market moves, the entire grid moves. However, while it is unlikely that a product price grid has a single rate/price that would be worse while the rest of the grid is better,if that does occur, Optimal Blue shows a single worse grid with the worse price at each rate and lock period for each product.
Worse Case Pricing
When an investor is configured for worse case Product Change or worse case Profile Change, this is the process that pricing goes through:
1. LO submits change request search (with worse case enabled).
2. Optimal Blue obtains the Original Lock Date final price grid and the Current final price grid.
3. Optimal Blue compares the Original final price grid for a particular product against that same product’s Current final price grid and look for the lowest price at each rate.
4. Optimal Blue generates the worse case blended grid for each product.
5. The worse case blended grid is what is used to build each of the 6 Origination result styles and the 6 Traditional result styles.
NOTE 1: If the final price is the same for both dates, we will take the price (and adjustments) from the original date.
NOTE 2: The worse case blended grid will only show rates that intersect on both the original price grid and the current price grid.
Best Pricing tab, Side-by-Side tab, and Blended tab
When an investor is configured for worse case Product Change or worse case Profile Change, this is the process that pricing goes through for the Best Pricing, Side-by-Side, and Blended tabs:
1. LO submits change request search (with worse case enabled).
2. Optimal Blue obtains the Original Lock Date final price grid and the Current final price grid.
3. Optimal Blue compares the Original final price grid for a particular product against that same product’s Current final price grid and searches for the lowest price at each rate.
4. Optimal Blue then generates the worse case grid for each product.
5. Then we look across all product grids (or all selected products) to find the best price for each rate. Instead of looking at the original price grid, we are looking at the worse case grid to find the best price.
Hiding Adjustments
If Show Worse Case Pricing is selected for any setting on a change request type, then we will hide adjustments in the search results.
Change Request Cost/Static Adjustors
Static adjustors (adjustors manually marked as static and change request costs) will be applied to both the original lock date’s price and the current date’s price. This is the same behavior as today. The change request/static adjustors will be calculated into the final price as usual and before the worse case comparison has occurred.
Eligible/Ineligible Products
- If a product is ineligible on both dates, the product will be displayed in the ineligible products section. The disqualifiers displayed will be from the original lock date.
- If a product is ineligible on only one date (and pricing is available for the other date), the product will be displayed in the disqualified section along with the appropriate disqualifiers from the date on which it was disqualified.
Expired Products
For expired products, product and profile change requests look at the current status of a product. For instance, if the product is Active on the original lock date but then Expired on the current date, then change request search results will display the product as Expired.
Note: This behavior will be changing with September release. At that point, we will always show the products as Active, regardless of the product status on the original lock date or on the current date.
Product Availability
If a product is available on one date but not the other, the product will not be displayed in the change request search results.
Best-Ex Only
Regardless of a product’s “Best-Ex Only” status at time of lock, if a product is currently marked as Best-Ex Only, then it will not show in the change request search results.
QM Policy
QM policy is applied after the worse case pricing is determined. So, if there are any QM settings that affect rates being removed or adjustments being hidden, that will take place after the worse case comparison has occurred.
Original Lock Date
If Show Pricing from Original Lock Date is chosen in the Change Request settings, then we will use either the Lock Request Date or Lock Accept Date based on the Lender Site Entity Preference.
*Lender Site Premium Content Options – OBuser System only entity preference: