In one sentence
A servicing report listing loans that deviate from expected status, such as missing documents, covenant breaches, or late payments.
The longer version
Exception reports surface the loans that need attention: missing final documents, unmet post-closing conditions, covenant breaches, or delinquencies. They are how servicers and auditors find the problems in a portfolio.
A clean closing and complete file mean fewer exceptions later. Trailing document exceptions, in particular, trace directly back to how well post-closing was managed.
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