Mortgage Pipeline

Mortgage loans that have been locked in with a mortgage originator by borrowers, mortgage brokers or other lenders. A loan will stay in an originator's pipeline from the time it is locked until it falls out, is sold into the secondary mortgage market or is put into the originator's loan portfolio. Mortgages in the pipeline are hedged against interest-rate movements.

A mortgage originator's pipeline is managed by its secondary marketing department. Mortgages in the pipeline are typically hedged using the To Be Announced market (or, the forward mortgage-backed security pass-through market), futures contracts and over-the-counter mortgage options. Hedging a mortgage pipeline involves spread and fallout risk.


Investment dictionary. . 2012.

Look at other dictionaries:

  • Mortgage pipeline — The period from the taking of applications from prospective mortgage borrowers to the marketing of the loans. The New York Times Financial Glossary …   Financial and business terms

  • mortgage pipeline — The period from the taking of applications from prospective mortgage borrowers to the marketing of the loans. Bloomberg Financial Dictionary …   Financial and business terms

  • Mortgage-pipeline risk — The risk associated with taking applications from prospective mortgage borrowers who may opt to decline to accept a quoted mortgage rate within a certain grace period. The New York Times Financial Glossary …   Financial and business terms

  • mortgage-pipeline risk — The risk associated with taking applications from prospective mortgage borrowers who may opt to decline to accept a quoted mortgage rate within a certain grace period. Bloomberg Financial Dictionary …   Financial and business terms

  • Pipeline — 1) An investment company whose purpose is to collect investment funds from a pool of individual investors and invest them in financial securities. 2) The underwriting procedure which must be completed by the Securities Exchange Commission (SEC)… …   Investment dictionary

  • Mortgage Fallout — A term used to describe the percentage of loans that do not close in a mortgage originator s pipeline. Mortgage originators adjust the fallout assumptions used in their hedge ratios as interest rates change relative to the loans they have in… …   Investment dictionary

  • Subprime mortgage crisis — Part of a series on: Late 2000s financial crisis Major dimensions …   Wikipedia

  • American Credit Union Mortgage Association — The American Credit Union Mortgage Association (ACUMA) is a U.S. trade organization for credit unions that are involved in the origination and securitization of real estate loans. ACUMA hosts industry conferences [… …   Wikipedia

  • Fallout Risk — The lending risk that occurs when the terms of a loan are confirmed simultaneously with the terms of a property sale. Because the mortgage terms are set but the sale is not finalized, there is a risk that the transaction may not be completed.… …   Investment dictionary

  • 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 as the sale terms are set. The risk is that either of the two parties, borrower or investor, fails to close and the… …   Financial and business terms

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