Mortgages, loans, financial matters

Profit is made when the loan moves from retail to wholesale.  The mark-up or profit on a loan originated by a broker is made when the loan closes.  This extra amount is on the settlement sheet and paid directly to the broker. The mark-up/profit on a loan originated by a bank is made when the [...]

The HJM framework has the advantage that it allows seamless extension from one to several sources of uncertainty. The choice of number of volatility factors to use is driven by a number of often conflicting considerations. Additional sources of uncertainty introduce additional degrees of freedom to the evolution of the term structure which allows decorrelation [...]