65 of 100 Loans Fall Out — And You're Paying for the Bad Ones Twice

65 out of 100 mortgage applications now fall out.

That's not the shocking part.

This is: most lenders are paying for the bad ones twice.

Once when they run credit, order the appraisal, and assign a processor to a file that was never going to fund. And again when the same problem surfaces at underwriting — after $1,610 in per-file spend is already gone.

→ Tri-merge credit pull: $540 → Full appraisal: $650 → Processor hours: $420 → Total on a dead file: $1,610 → Caught at application, upfront: $0

The math is brutal. One documented lender was bleeding $60,000–$80,000 a month in avoidable fallout costs (Certified Credit). And with credit costs up 1,500% since 2022, every miss is more expensive than the last.

Here's the part nobody talks about: your credit report can't save you.

It tells you what already went wrong. It won't catch the synthetic identity, the undisclosed mortgage hidden in MERS, the DTI-killing lien sitting in a civil court database, or the employer that doesn't exist. By the time the credit report is back, you've already paid.

At PitchPoint, we built ADV to run the five checks your credit report will never run — identity, hidden liabilities, employment, property defenses, and total participant validation — in a single pass, the instant the application lands. One risk score. One verdict: fund it, or kill it. Before you spend a dime.

3,000+ institutions already run this on every file. <1% false positives. Up to 30% lower underwriting cost. Native inside Encompass® and MeridianLink®.

If fallout is showing up in your numbers, the preventable share is larger than you think. I laid out the full breakdown — the data, the two-bucket framework, and what actually moves the needle — in a new article.

And if you want to see ADV in action: Stop Funding Dead Files →

— Stephen Schrump, CEO, PitchPoint Solutions