MORTGAGE-PIPELINE RISK
\mˈɔːɡɪd͡ʒpˈa͡ɪpla͡ɪn ɹˈɪsk], \mˈɔːɡɪdʒpˈaɪplaɪn ɹˈɪsk], \m_ˈɔː_ɡ_ɪ_dʒ_p_ˈaɪ_p_l_aɪ_n ɹ_ˈɪ_s_k]\
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A risk a lender takes that a mortgagor may not lock in the interest rate for the grace period between drawing up the mortgage and the closing, hoping that the interest rate will fall before the closing. If it happens, the borrower gets a better deal, and the lender loses the higher gain. Also known as reverse price risk.
By Henry Campbell Black
Word of the day
Mustagh Range
- a mountain range in northern Kashmir; an extension of the Hindu Kush; contains 2nd highest peak