Mortgage fallout

Mortgage fallout,

Definition of Mortgage fallout:

  1. The percentage of home loans that do not close within the pipeline of the mortgage originator. These fallout assumptions are used in the hedge ratios of mortgage originators and they are an extremely important part of the overall efficiency of a mortgage lender.

  2. Mortgage originators may be individual mortgage brokers, mortgage companies or mortgage bankers. They assist the prospective borrower in finding and attaining a mortgage. They themselves may not be lenders, but part of their role is to bring the prospective borrower and the potential lender together.

  3. Mortgage fallout refers to the percentage of loans in a mortgage originator’s pipeline that fail to close. This number is considered a significant indicator of the originator’s efficiency. Mortgage originators base their hedge ratios on their fallout assumptions. Fallout assumptions change as interest rates change, since interest rates will generally affect the amount of borrowers seeking and being approved for loans.

Meaning of Mortgage fallout & Mortgage fallout Definition