In relation to a mortgage/ mortgage pipeline, it constitutes the risks associated with a potential decline (rejection) of the mortgage rate quoted during the application process. In other words, it reflects all risks that may arise in accepting applications from potential mortgage borrowers who may not accept, within the grace period offered, the mortgage rate quoted.
Mortgage pipeline represents the time gap that lapses between submission of mortgage loan applications by potential borrowers and the initiation of actual marketing/ disbursal. This involves locking in mortgage loans with an originator at the request of borrowers, mortgage brokers, or lenders. Once locked in, a mortgage remains in an originator’s pipeline until the time it is processed (sale in the secondary market, addition to the originator’s portfolio) or it falls out.
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