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.
Copyright © 2012, Campbell R. Harvey. All Rights Reserved.

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.
Farlex Financial Dictionary. © 2012 Farlex, Inc. All Rights Reserved
References in periodicals archive ?
He had also been involved in fall-outs with club officials and players, midfielder Leon Britton recently admitting his relationship with Sousa was the major factor in seeing him leave South Wales this summer.
They are looking at his associates and local fall-outs. Anyone with information should call the Matrix team on 0151 777 5699 or Crimestoppers, anonymously, on 0800 555111.
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Boredom sets in, often leading to silly pranks and fall-outs.
Like Best and Botham, Ballesteros was awesome to watch, every bit as much of a maverick in his fall-outs with the top brass on both the European and American Tours and fiercely competitive.
From family pressures, to conserving their energies and to public fall-outs with their managers, the word international 'retirement' seems all to regular occurrence.
The award for public fall-outs has been handed out to Serbia and Montenegro striker Dusan Petkovic.
The album is the fabulous product of the Warlocks (above) recent car crash life of drugs, tantrums and the sort of fall-outs that have seen them go through at least 19 members in the short time they've been together.
As well as family fall-outs and illicit kisses under the mistletoe, there have been moments of pure Corrie comedy.
Guidolin's cause has not been helped after two high-profile fall-outs with his own players.
Despite some fall-outs over the years, Schumacher is still involved with Cologne and this week confirmed that striker Lukas Podolski is bound for Arsenal at the end of the season.
And with a crazy $5million up for grabs to the winner, expect tears, tantrums and fall-outs on a scale never seen before.