An auction of $878 million of mortgage servicing rights by an unidentified New England bank is expected to attract heavy interest this week as big players in the home loan industry look to load up on servicing to insulate themselves against higher interest rates.

Rights to service loans - that is, to administer them for a fee - gain in value when rates rise, because borrowers are more likely to keep their loans than to refinance. Big companies with economies of scale often seek to beef up their portfolios when rates rise. The smaller players mitigate their losses by selling servicing and taking profits.

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