Throughout the process of originating and selling mortgages, mortgage companies face a number of risks. Therefore, it is important for a lending institution to evaluate the risks of mortgage loan default through a process commonly referred to as:

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The process of evaluating the risks of mortgage loan default is known as loan underwriting. This involves reviewing the borrower's credit history, income, employment, and other factors to determine the likelihood of the borrower being able to repay the loan. This helps mortgage companies avoid the risk of making loans to borrowers who are unlikely to be able to make their payments, reducing the likelihood of default and financial losses. Mortgage fallout refers to the percentage of loans that are cancelled or fall through during the loan origination process, loan servicing refers to the processes of collecting payments, managing escrow accounts, and handling delinquencies and defaults, and warehousing refers to the process of temporarily holding a pool of mortgages before they are securitized or sold to other investors.

Throughout the Process of Originating and Selling Mortgages, Mortgage Companies