We develop an intertemporal model for valuing mortgage loan servicing contracts. The model includes a stochastic short-term interest rate and realized inflation rate which jointly determine the current mortgage coupon rate, the mortgagor's prepayment decision, the servicer's future net cash flows, and the rate at which to discount these future cash flows. Several potential uses of the model for institutions that service mortgages and trade servicing portfolios are illustrated by the application of the model to servicing fixed-rate mortgages and adjustable-rate mortgages. The model also is applicable to regulatory issues and to the servicing of other types of loans.