In regards the risks associated with mortgage origination, price risk is the risk that applicants or those who were issued commitment letters will not close (i.e., complete the transaction by purchasing the property with funds borrowed from the mortgage originator).

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Price risk in mortgage origination actually refers to the risk that changes in interest rates will change the value of a mortgage or a pool of mortgages, affecting the profitability for the lender or investor. The risk described in the statement is more accurately termed as "fallout risk" or "pipeline risk," which concerns applicants not completing the transaction.

In Regards the Risks Associated with Mortgage Origination, Price Risk