Secondary-market commitment where a lender generally delivers a specific closed loan if it closes.
A best-efforts commitment is a secondary-market commitment where a lender generally delivers a specific closed loan if that loan closes.
Best-efforts commitment matters because lenders manage borrower locks and investor delivery obligations at the same time. This type of commitment is one way a lender can connect a particular borrower loan with a downstream investor execution.
It also matters because borrowers may hear that a rate is “locked” and think the lender simply holds the loan internally. In many cases, the lender is also managing a sale or delivery path behind the scenes.
Borrowers usually encounter the borrower-facing side as a Rate Lock, not as a best-efforts commitment.
The term becomes practical when explaining why the lender cares about closing on time, matching the locked loan details, and delivering the closed loan into the intended investor channel.
| Commitment type | Plain-language idea |
|---|---|
| Best-efforts commitment | Delivery is tied to a specific loan if it closes |
| Mandatory Commitment | Delivery obligation is firmer and less tied to one borrower closing |
| Rate Lock | Borrower-facing promise about rate terms for a limited time |
A lender locks a borrower’s mortgage and places that expected loan into a best-efforts investor commitment. If the borrower closes as expected, the lender delivers that loan into the commitment.
Best-efforts commitment differs from Mandatory Commitment because a mandatory commitment usually creates a stronger delivery obligation, while best-efforts execution is more closely tied to whether the specific loan closes.
It differs from Rate Lock because the rate lock is the borrower-facing agreement, while the best-efforts commitment is part of the lender’s secondary-market execution.
It also differs from Loan Delivery because the commitment is made before delivery, while delivery is the post-closing handoff.