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Fallout is a mortgage jargon used to describe the amount of loan applications that fail to close.
When we consider that many borrowers apply for mortgages from at least 3 lenders before eventually choosing one to take up, the amount of fallouts should easily outnumber the amount of acceptances.
Fallout is an important statistic for lenders to measure their effectiveness and competence in closing loans.
The thing is that lender and brokers don’t receive any remuneration from the borrower if a loan is not taken up.
So if a borrower applies for a loan and never took it up, it exhausts the resources of the lender in originating the loan.
All in all, fallout rate serves an important role in improving and enhancing business operations for more efficiency.