Suppose that a mortgage bank "locked in" an interest rate for a prospective borrower at 8.5%.However,prior to the loan closing,the market mortgage rate falls to 7.5 %.In this scenario,the mortgage banker would be most concerned with which of the following risks?

Question

Quizplus · Accepted Answer

Pipeline fallout risk refers to the risk that a borrower will not close on a loan after the rate is locked, especially if market rates fall, making the locked rate less attractive.

Suppose That a Mortgage Bank "Locked In" an Interest Rate