Additional hedge(redirected from Additional Hedges)
Copyright © 2012, Campbell R. Harvey. All Rights Reserved.
A way for a mortgage lender to protect itself from the risk that a potential borrower will reject a loan after the terms are set but before the deal is finalized. Such a rejection could result in a loss for the lender, particularly if it has already made arrangements to repackage and sell the mortgage to a third party. An additional hedge protects against this. See also: Fallout Risk.
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