Mortgage Pipeline Hedging: The Opportunity & Key Components of a Successful Program

Speaker: Robert Perry, Principal

Topic: Mortgage Pipeline Hedging

Competitiveness in the mortgage marketplace has pushed risk management and profitability strategies to the forefront. Originating conforming mortgage loans to be sold to the agencies exposes your institution to pricing risk from the time of the initial commitment to the borrower until the time that the loan is committed for sale to the agencies. Currently, many institutions pay GSEs to hedge their pipeline for them, at a significant cost. Effective mortgage pipeline hedging presents an opportunity to enhance return and profitability through risk reduction and cost savings.

Successful mortgage pipeline hedging programs require an integration of in depth origination and asset management principles. A portfolio manager with a deep understanding of mortgage analytics, price sensitivities, and convexity risk should have a greater grasp of the risk profile of the mortgage assets being hedged. In this webinar, we will discuss the current opportunity and address the four main components of a successful mortgage pipeline hedging program that every institution should understand in order to meet their financial goals.