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Hedge Gains Prompt New Look at Bottom Line

Wells and other major servicers' traditional hedging practices have thrived because of peculiarities of the mortgage servicing industry, MSR fair-value accounting and a yield curve that is unusually steep


By Jeff Horwitz, American Banker

February 12, 2010

Among the small tribe of analysts and consultants who follow such things, Wells Fargo holds a reputation for savvily hedging the value of its mortgage servicing portfolio. In most years, that means that the company's hedges tidily cancel out any losses in the value of its mortgage servicing rights.

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