Mortgage consultant

The level of expected losses arising from delinquencies should be viewed as a part of the costs of doing business. Actual losses may be higher or lower. Expected credit losses for individual loans depend on the probability that the loan will become delinquent and the likely level of losses in such an event. It is much harder to estimate the probability of default than likely loss rates on delinquent loans.
Loss rates on delinquent accounts depend on four variables. The actual exposure at the time the account was frozen, the level and quality of collateral, the time taken to resolve the case and other direct costs such as legal fees.