Mortgage Pipeline


DEFINITION of '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.

BREAKING DOWN 'Mortgage Pipeline'

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.

  1. Mortgage Banker

    A company, individual or institution that originates mortgages. ...
  2. Secondary Mortgage Market

    The market where mortgage loans and servicing rights are bought ...
  3. Mortgage Broker

    An intermediary who brings mortgage borrowers and mortgage lenders ...
  4. Interest Rate

    The amount charged, expressed as a percentage of principal, by ...
  5. Mortgage Fallout

    A term used to describe the percentage of loans that do not close ...
  6. Sensitivity

    The magnitude of a financial instrument's reaction to changes ...
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