For instance, a lender or an investor may face credit risk, the risk of loss resulting from the counterparty's failure to perform its financial obligations, as well as interest rate risk, the risk of loss from a rise in interest rates during the loan term.
Needless to say, regular bank loans entail similar risks; however, mortgages present larger risks due to their extremely long maturity, and the risk management of mortgages is more difficult. Securitization is an example of the enhancement of risk management techniques achieved through advances in information processing.