Mortgage Origination & Rate-Lock Pipeline — impact tolerance ≤ 1 business day — ITOL

Impact tolerance: ≤ 1 business day — any pipeline stall past one business day. ≈ $450M/day of new locks stops pricing, existing locks age toward expiration, and the TBA hedge reprices against a pipeline the desk can no longer see (illustrative default — trace the derivation, then replace with your own harm analysis)

Definition: Take mortgage applications, issue TRID disclosures (the TILA-RESPA integrated disclosures), price and commit rate locks, underwrite, and clear loans to close — plus the secondary-marketing leg that hedges the locked pipeline in the TBA (to-be-announced) mortgage-securities market. Distinct from mortgage-servicing, which manages loans after closing. This service is the ≈ $450M/day of new locks between a quoted rate and a funded home.

Why it is designated: Origination cycles are measured in weeks, but three clocks inside them are not. TRID fixes three-business-day windows around the process: the Loan Estimate after application, a revised estimate after a rate lock, and the Closing Disclosure before consummation. Those clocks run through an outage. Rate locks expire on their contract dates whether or not the loan-origination system (LOS) is up. Extension fees or re-locks then land on borrowers at whatever the market now charges. And the pipeline hedge is marked continuously: a desk blind to its own locked pipeline is running an open TBA position, with exposure accumulating at ≈ $450M/day. One business day is the longest stall those three clocks absorb. Past that, the stall converts an IT incident into borrower harm, disclosure breaches, and an unhedged market position at once.