When Mortgage Pipeline Hedging is a Must

Institutions engaging in mortgage loan production and sale to investors (e.g. the agencies) understand this operation can be highly profitable, but it also can be highly cyclical. Changes in mortgage pricing can lead to significant variability in profitability,...

Three Steps for Hedging Mortgage Pipeline Risk

Three Steps for Hedging Mortgage Pipeline Risk Robert Perry Principal, ALM & Investment Strategy July 25, 2018 Mortgage lending is a sizable part of most consumer banks’ business, providing an important revenue stream and helping them stay competitive. To reduce...

Advanced Mortgage Pipeline Hedging Techniques

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 the GSEs to hedge their pipeline for them, at a significant cost. Effective mortgage pipeline management presents an opportunity to enhance return and profitability through risk reduction and cost savings.

Mortgage Pipeline Hedging

Institutions engaging in mortgage loan production and sale to investors (e.g. the agencies) understand this operation can be highly profitable, but also can by highly cyclical. Changes in mortgage pricing can lead to significant variability in profitability. Learn how to protect yourself from the volatility of the mortgage market.