Industry officials see no losers and perhaps a few new winners in mortgage banking as a result of a U.S. Tax Court opinion in a Fannie Mae vs. IRS case that provides favorable tax treatment for hedge transactions on interest-rate sensitive instruments.

The ruling in effect gives favorable tax treatment for hedges that don't cover all interest rate risk of a particular transaction and which use either a short or long position to reduce interest rate risk, the official said.

Limited Time Offer

Save $400 off your subscription. Special offer ends April 30, 2017.

14-Day Free Trial

No credit card required. Complete access to articles, breaking news and industry data.