Mortgage Market Shifts: October 2025 Brings Surprising Fair Value Adjustments
As we step into October 2025, MSR holders are facing a pivotal moment. Our latest analysis reveals that fair value guidance for existing portfolios is set to dip slightly from the August 31, 2025, benchmarks. But here's where it gets intriguing: the primary driver of this decline isn't what you might expect. While the float income rate has remained steady since August 31, 2025, exerting minimal influence on the escrow component, it’s the drop in mortgage rates that’s stealing the spotlight—and not in a good way. This shift is poised to be the main culprit behind the reduction in fair values.
What Does This Mean for You?
MSR holders, take note: fair values are expected to decrease by anywhere from less than one basis point to two basis points. This adjustment is almost entirely attributed to the downward trend in mortgage rates. For those managing portfolios with a mix of Conventional and Government loans, the changes are slightly more nuanced:
- Conventional Loans: Anticipate a fair value change ranging from -1 to -2 basis points compared to August 31, 2025, marks.
- Government Loans: Expect a slightly steeper decline, with changes ranging from -1 to -3 basis points over the same period.
And this is the part most people miss: these adjustments, though small, can have ripple effects across your portfolio. Understanding these nuances is crucial for making informed decisions in today’s dynamic market.
Why This Matters
At MCT, we’ve spent over two decades at the forefront of innovation in the mortgage secondary market. By blending deep industry expertise with cutting-edge technology, we’ve become the go-to leader in mortgage capital markets solutions. From pioneering best execution loan sales to launching the most advanced marketplace for mortgage-related assets, we empower lenders, investors, and network partners to thrive—no matter the market conditions.
Our technology and insights continue to redefine how mortgage assets are priced, locked, protected, valued, and exchanged. But here’s the controversial part: as the market evolves, are traditional valuation methods still sufficient? Or is it time to embrace more dynamic, tech-driven approaches? We’d love to hear your thoughts in the comments.
Next Steps
If you’re navigating these changes and want to dive deeper, our team is here to help. Whether you have questions or want to schedule a call, don’t hesitate to reach out. Visit https://mct-trading.com/contact/?mssg=I%20am%20interested%20in%20learning%20about%20MSR%20Services to get started.
About MCT
For over 20 years, Mortgage Capital Trading (MCT) has been a driving force in the mortgage secondary market. By combining unparalleled expertise with a passion for innovation, we’ve revolutionized how mortgage assets are managed. Our solutions—from modern loan sales strategies to advanced asset marketplaces—ensure that lenders, investors, and partners have the tools to succeed in any market.
For more information, visit https://mct-trading.com/ or call (619) 543-5111.
Media Contact
Ian Miller
Chief Marketing Officer
Mortgage Capital Trading
619-618-7855
pr@mctrade.net
Final Thought
As we navigate these fair value adjustments, one question lingers: How will you adapt to the evolving mortgage landscape? Share your insights below—we’re eager to hear your perspective!
