One market dynamic that accompanied declining interest rates during the first three quarters of 2024 is a notable increase in hedging of mortgage servicing rights (MSR) assets. Public company filings and conversations with mortgage hedging software providers and advisors shed light on the reasons behind this trend in MSR asset hedging, including the use of SOFR-based valuation models and the advantages of Eris SOFR Swap futures over traditional interest rate swaps.
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