Accounting for Mortgage Originations US

Approval Process

Pipeline

Warehouse

V )

Funding Date

Application

No entries -no accounting event has occurred

Lock Date

Lender recognizes commitment and related hedges (initial value typically zero)

Funding Date

Lender funds mortgage and recognizes on balance sheet

Sale Date

Gain or loss on sale recognized

Lender marks commitment and related hedges to fair value through earnings

Any unhedged declines in loan value are recognized immediately in earnings

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