Fallout risk

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Fallout risk

A type of mortgage pipeline risk that is generally created when the terms of the loan to be originated are set at the same time the sale terms are established. The risk is that either of the two parties, borrower or investor, fails to close and the loan "falls out" of the pipeline.

Fallout Risk

In mortgages, the risk that a potential borrower (that is, a property buyer) will withdraw from the deal before it is finalized. Banking regulation requires that banks offering a given interest rate hold that rate for 60 days, during which the potential borrower is under no obligation to actually take out the mortgage loan. During that time, the bank usually makes preparations to sell the mortgage as a mortgage-backed security or as some other investment vehicle. If the potential borrower withdraws during those 60 days, the bank is exposed to the risk that it will lose out on the return it could have made from the MBS or other investment vehicle. Fallout risk is also called borrower fallout.
References in periodicals archive ?
Set a cleaning rota - chores are another major source of fall-outs between housemates.
There's no time now for any further fall-outs between the authorities.
Boredom sets in, often leading to silly pranks and fall-outs.
It is legitimate to ask: Have the high profile fall-outs and failures of the past 18 months - some personal, others relating to the city's lack of focus and good management in key aspects of Capital of Culture and more general town hall finances - debilitated the Lib Dems' ability to continue with credibility?
Despite the fall-outs, the group won a place in the final rounds of the talent show - becoming one of the final six group acts.
The award for public fall-outs has been handed out to Serbia and Montenegro striker Dusan Petkovic.
And they fear homes will suffer a constant stench, and say the fall-outs could affect three nearby schools.
But despite several fall-outs and successful solo work, the members have managed to keep the band together.
However, rumours of fall-outs began with members wanting to go in different directions.
I couldn't have asked for a better crew, we've had no fall-outs, lots of smiles, lots of hard work.
Remaining original member Keisha Buchanan, 25, left in September after a series of fall-outs with Amelle Berrabah, 25, and Heidi Range, 26.
THE collapse of the global construction market has been good news for a Stokesley firm which specialises in contractual fall-outs.