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Mortgage Today (AM) - 09/01/26

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September 1, 2026

**WTMS Blog Today = What's up in Mortgage Today (AM) - 09/01/2026** Bond markets delivered another gut-punch to mortgage originators on Tuesday morning as geopolitical tensions and inflation fears pushed the 10-year Treasury yield to 4.78%, its highest level since January 2025. UMBS 30-year securities fell a quarter point to 96.25 on the 5.0 coupon, while GNMA securities posted similar weakness across all coupons. Oil surged above $92 per barrel after attacks on tankers in the Strait of Hormuz reignited Middle East concerns, accelerating the selloff that started with Federal Reserve Vice Chair Kevin Warsh's hawkish Jackson Hole remarks. The negative momentum feels relentless, with traders now pricing a 70% probability of a September rate hike. Technical support levels broke yesterday, signaling deeper weakness could persist unless inflation data provides relief. Treasury yields climbed across the entire curve on Tuesday, with the 2-year jumping to 4.371% and the 5-year hitting 4.533%. Thirty-year yields extended their run above 5%, marking the longest stint above that level since 2006—a historic signal of long-term inflation and growth concerns. Global bond markets deteriorated sharply, with UK gilts underperforming European peers and Japanese 10-year yields hitting their highest level this century as Treasury Secretary Scott Bessent pressed the Bank of Japan to tighten policy. The dollar strengthened against most major currencies while equities stumbled, with S&P 500 futures down 0.6% and Nasdaq 100 futures down 1.1% reflecting flight-to-quality selling. This combination of rising rates and falling stocks typically signals recession fears, which could eventually help mortgage origination costs if volumes spike from distressed refinancing activity. The mortgage industry confronts a brutal operating environment that's forcing consolidation and technological change across the sector. Origination costs hover around $11,000 per loan while pull-through rates remain weak, leaving lenders searching for scale and operational discipline to survive. Industry leaders like Union Home's Bill Cosgrove argue that consolidation now is about finding balance-sheet strength and talent rather than chasing volume in a market where "being merely average operationally is becoming increasingly difficult to sustain." Canopy Mortgage recently passed 800 employees by targeting loan originators exhausted by bait-and-switch guarantees and artificial teaser rates from competitors. The path forward requires fundamental changes to loan origination economics through technology and operational rigor, not financial engineering alone. Fannie Mae and Freddie Mac continue adapting to evolving borrower demographics and shifting refinance demand patterns. Fannie Mae reported $4.0 billion in net income for Q2 2026, while Freddie Mac posted $3.8 billion—a 61% increase year-over-year—as credit loss provisions swung dramatically in their favor. Freddie Mac's Bulletin 2026-10 overhauled key lending guidelines, dropping the division factor from 240 to 180, removing the 80% LTV ceiling, and opening eligibility to all occupancy types with a new $30,000 minimum. Meanwhile, debt-driven refinancing opportunities remain largely untapped, with Total Expert highlighting that 20–30% of average lender databases may be ready for cash-out refi and HELOC conversations backed by record home equity levels. Reverse mortgages and second-lien products are gaining traction as lenders search for volume among seniors, with roughly 36% of homeowners aged 75+ currently denied traditional HELOCs. Mortgage servicing rights valuations face a recalibration in this "higher for longer" rate environment where historical pricing models no longer fit current market dynamics. MSR values depend far more on Treasury yield curves, mortgage basis, and liquidity conditions than on mortgage rates alone, meaning a single valuation model spanning multiple years produces unreliable guidance. Bulk MSR multiples appear elevated in absolute terms, yet that assessment means less given historically high mortgage rates, while new-issue and SRP pricing has surprisingly flatlined relative to primary rates. This divergence between bulk and new-issue markets creates pricing inefficiencies that savvy servicers and investors can exploit. Understanding these nuances becomes critical as firms evaluate portfolio management and potential M&A opportunities in a consolidating sector. Economic data this week will prove crucial for Fed policy direction, starting with today's August ISM Manufacturing Index and July job openings data. August inflation readings next week will carry far more weight than payrolls for determining whether the Fed hikes on September 16, with Vice Chair Warsh's recent hawkish signals suggesting the central bank's inflation-fighting priority now overshadows labor market concerns. If sticky inflation data emerges, expect the new dot plot to signal additional tightening beyond September, reinforcing upward pressure on front-end yields and extending the mortgage rate grind that originated at Jackson Hole. Friday's payrolls report and next week's CPI print will shape mortgage market activity through month-end, so originators should prepare for potential volatility as positioning shifts around each data release. **Locking vs Floating** Morning weakness on August 31 tested key technical support levels for both MBS and Treasury bonds, though that weakness may have stemmed from temporary factors rather than fundamental deterioration. Investors should remain defensive until a clear reversal emerges in the broader negative trend, as attempting to time correction rallies amid downward momentum proves nearly impossible. Higher ceilings and floors on 10-year yields now guide bigger-picture bond market direction more reliably than intraday MBS movements, so tracking Treasury positioning helps explain where rates are headed over the coming weeks. **Today's Events** August ISM Manufacturing Index (final reading) July Job Openings July Construction Spending August ISM Manufacturing Index (preliminary) Fed Vice Chair for Supervision Barr remarks **Bond Pricing** **UMBS 30 yr** | Coupon | Price | Intra-Day Change | | 5.0 | 96.25 | -0.25 | | 5.5 | 98.82 | -0.19 | | 6.0 | 101.02 | -0.1 | **GNMA 30 yr** | Coupon | Price | Intra-Day Change | | 5.0 | 96.69 | -0.18 | | 5.5 | 99.18 | -0.17 | | 6.0 | 101.26 | -0.12 | **Treasuries** | Term | Yield | Price | Intra-Day Yield Change | | 2 yr | 4.371 | 99.534 | 0.028 | | 3 yr | 4.436 | 99.482 | 0.034 | | 5 yr | 4.533 | 99.302 | 0.026 | | 7 yr | 4.647 | 99.128 | 0.033 | | 10 yr | 4.78 | 98.783 | 0.027 | | 30 yr | 5.263 | 97.924 | 0.018 |

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Mortgage Today (AM) - 08/31/26

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August 31, 2026

**WTMS Blog Today = What's up in Mortgage Today (AM) - 08/31/2026** Federal Reserve Chair Kevin Warsh's hawkish Jackson Hole speech has roiled mortgage markets, pushing traders to price in nearly a 60% probability of a September rate hike, but skeptical bond investors doubt the Fed will actually pull the trigger. Warsh emphasized that inflation remains sticky and that rates are the Fed's "predominant tool," yet he provided no forward guidance on whether officials will act next month. Markets digested competing signals: the 2-year Treasury fell 2 basis points while the 10-year climbed 3.5 basis points intraday, reflecting uncertainty about both near-term policy and long-term inflation. The real culprit driving uncertainty is Warsh himself—his communications style is less predictable than his predecessors, and he has flip-flopped market reactions three times in four months. Agency mortgage securities shed modest ground as bond weakness pressured valuations across the curve. Mortgage originators face a dangerous confluence of headwinds beyond rate volatility: home prices have fallen to five-year lows, single-family housing starts have collapsed to their second-lowest level since 2020, and fraud is accelerating in DSCR and investor-property segments. Repurchase claims are climbing as private mortgage insurance deficiencies dominate default outcomes, while occupancy and income fraud add further exposure. Falling home values are pushing more loans into PMI-required territory, expanding losses when defaults occur. Lenders obsessed with political "wins" are missing the real risk: underwriting quality, collateral deterioration, and sophisticated fraud schemes that could materially erode profitability. The employment report this Friday will be critical; nonfarm payroll growth is expected to rebound to 80,000, but that data alone won't resolve whether the economy is cooling gradually or heading toward sharper contraction. Mid-curve Treasury yields have climbed to multi-year highs as the market reprices term premium upward, reflecting weaker demand and dimmer growth expectations. The 30-year Treasury yield has spent 37 consecutive days above 5%, and rising 100- and 200-day moving averages signal a structural shift toward a higher-rate regime that is materially bearish for long-duration bonds and mortgage-backed securities. Oil prices surged nearly 4% on renewed Middle East hostilities, adding inflation complexity to the Fed's calculation in the weeks ahead. Consumer fundamentals are deteriorating: real disposable income has lagged spending for 25 consecutive months, and wage growth has slowed to just 0.5% year-over-year. That combination of elevated borrowing costs, stagnant incomes, and energy headwinds is beginning to constrain consumption and raise recession odds. The LDS Church is assembling one of America's largest and least transparent real estate empires, with plans to develop over 12,000-home master-planned communities near Denver and other major metros using 2.4 million acres worth more than $20 billion in assessed value. This represents a significant supply injection at a time when single-family housing production is already at historic lows, and the move underscores how institutional capital is repositioning around America's housing shortage. Commercial and residential properties owned through church subsidiaries generate substantial income streams while enjoying tax advantages unavailable to traditional homebuilders. For mortgage lenders, this signals another headwind: mega-scale developers operating outside conventional financing channels will capture disproportionate share of available development capital and borrower attention. Industry conferences are ramping up this week and next, with the PNMLC Annual Conference, Loan Vision Innovation Conference, and MBAMW Annual Conference all kicking off September 13–17 to discuss technology adoption, underwriting resilience, and growth strategies. Meanwhile, a senior mortgage banking executive with experience in builder channels and production leadership is seeking a role as Chief Production Officer or Head of Production at a lender with expansion ambitions. Employment remains mixed: Deephaven Mortgage is hiring wholesale account executives nationwide with non-QM and equity product access, while Homa Mortgage seeks loan officers in Texas, Florida, and California markets for AI-native, buyer-only brokerage operations. Talent acquisition remains competitive, and the industry is actively recruiting seasoned producers willing to retool for modern lending operations. STRATMOR Group research reveals a critical gap between borrower satisfaction scores and actual referral behavior: one lender doubled its referral rate from 11.5% in 2022 to 22.6% year-to-date in 2026 despite flat NPS scores. The key driver was not satisfaction measurement but behavioral activation—asking for referrals, staying connected post-close, and creating memorable experiences that convert satisfied borrowers into advocates. Lenders who merely track "likelihood to recommend" are leaving production on the table; the winners are replicating the specific behaviors that drive real referral volume. This insight matters because referral economics are increasingly critical when purchase pipelines are competitive and borrower acquisition costs are rising. **Locking vs Floating** Markets are signaling a defensive posture amid Warsh-driven volatility and sticky inflation expectations. Until the bond market confirms that the recent hawkish messaging is an overreaction, mortgage professionals should remain cautious on duration exposure and protective of lock positions. MBS pricing can help manage intraday risk, but the 10-year ceiling and floor levels provide better visibility into broader bond market momentum and term-premium trends that ultimately dictate mortgage rate floors. **Today's Events** No U.S. economic data is scheduled for today, though G20 finance ministers are meeting in North Carolina. The Dallas Fed will release manufacturing activity this afternoon. Tomorrow begins a heavier slate: S&P Global and ISM manufacturing PMI, construction spending, JOLTS job openings, and Dallas Fed services data are all due out. **Bond Pricing** **UMBS 30 yr** | Coupon | Price | Intra-Day Change | | 5.0 | 96.47 | -0.19 | | 5.5 | 98.96 | -0.13 | | 6.0 | 101.08 | -0.06 | **GNMA 30 yr** | Coupon | Price | Intra-Day Change | | 5.0 | 96.82 | -0.22 | | 5.5 | 99.38 | -0.04 | | 6.0 | 101.39 | -0.01 | **Treasuries** | Term | Yield | Price | Intra-Day Yield Change | | 2 yr | 4.337 | 99.597 | -0.021 | | 3 yr | 4.4 | 99.584 | -0.011 | | 5 yr | 4.494 | 99.472 | 0.011 | | 7 yr | 4.611 | 99.34 | 0.018 | | 10 yr | 4.748 | 99.034 | 0.035 | | 30 yr | 5.244 | 98.213 | 0.039 |

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Mortgage Today (AM) - 08/26/26

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August 26, 2026

**WTMS Blog Today = What's up in Mortgage Today (AM) - 08/26/2026** PCE inflation data arrived slightly hotter than expected, triggering an immediate bond market selloff that pushed mortgage-backed securities down and the 10-year Treasury yield up 2.4 basis points to 4.65 percent. Headline PCE prices rose 0.2% monthly versus a 0.1% forecast, while core inflation came in exactly at expectations at 0.2% monthly and 3.3% annually. The market's negative reaction suggests traders had positioned for softer inflation, leaving little room for disappointment. UMBS 5.5 coupons slipped 0.17 points, and GNMA securities followed suit with comparable weakness. This morning's data reinforces the Fed's hawkish stance heading into September. Mortgage applications declined 1.0% last week as the 30-year fixed rate climbed to 6.78 percent—its highest level in three weeks. Refinancing activity dropped 2% week-over-week and 17% year-over-year, becoming the primary headwind on the application index. Purchase applications held relatively steady but remain 5% below year-ago levels, signaling that rising rates continue to pressure buyer demand. The roughly 20-basis point increase in mortgage rates over the past two months is beginning to squeeze the origination pipeline. Risk-averse loan officers should consider locking committed borrowers today. Durable goods orders jumped 1.1% in July, crushing economist expectations of 0.5% growth and signaling strength in equipment and machinery demand. Meanwhile, second-quarter gross domestic product confirmed at 1.5%, matching forecasts but marking a deceleration from 2.1% growth in the prior quarter. Personal spending rose 0.2% against a 0.1% estimate, while personal income surged 0.4% versus the 0.2% expectation. These mixed signals—strong orders balanced against moderating growth—create uncertainty for the Federal Reserve's next move. The Jackson Hole Symposium later this week may provide clarity on policy direction. New home sales collapsed 10.5% month-over-month in July to a 607,000 annualized pace, pushing inventory higher and stoking fears of price pressure ahead. Consumer confidence fell to its lowest level of 2026, even as the Case-Shiller home price index rose 2.1% year-over-year. The FHFA index, meanwhile, held flat, suggesting demand is cooling faster than valuations. This divergence points to an increasingly bifurcated housing market where some borrowers face affordability stress while others maintain equity cushions. Lenders focusing on recapture strategies through home equity lines and seconds are well-positioned for the current environment. Oil prices extended their weekly decline, falling 2.2% to $80.58 per barrel as Iran and Oman work toward a deal to resume shipping through the Strait of Hormuz. This easing of geopolitical risk has temporarily calmed inflation fears, though energy remains a wild card for Treasury markets. The week's $70 billion 5-year note auction closes today, and the results could signal whether demand for intermediate duration bonds is holding up. Crude oil inventories round out the afternoon calendar. Treasury buyback programs have provided support, but fundamental forces—deficits, issuance, and growth—continue pushing yields higher. Today's market action hinges on whether this morning's disappointment in PCE motivates additional selling or attracts value-hunting buyers near current levels. The 10-year yield must break below 4.62% to signal a genuine trend reversal; failure to do so keeps the ceiling intact. With Nvidia earnings looming after the close and the Fed symposium kicking off later this week, traders appear content to hold relatively flat positions. This uncertainty creates opportunities for disciplined originators to counsel risk-averse borrowers to lock. Market directional moves on war and fuel prices remain unpredictable. **Locking vs Floating** Today marks the first meaningful challenge to the uptrend since late July, with the potential to test bond market conviction. Risk-averse clients should use any intraday strength to lock in rates, while risk takers may wait for confirmation below the 4.62% yield floor before committing. The 20-basis point rise in mortgage rates over two months is already weighing on purchase demand, making immediate locks prudent for committed pipelines. **Today's Events** Core PCE (m/m) (Jul): 0.2% vs 0.2% forecast, 0.1% prior Core PCE (y/y) (Jul): 3.3% vs 3.3% forecast, 3.3% prior Durable Goods (Jul): 1.1% vs 0.5% forecast, 0.3% prior GDP Q2: 1.5% vs 1.5% forecast, 2.1% prior PCE (y/y) (Jul): 3.7% vs 3.6% forecast, 3.7% prior PCE Prices (m/m) (Jul): 0.2% vs 0.1% forecast, -0.1% prior **Bond Pricing** **UMBS 30 yr** | Coupon | Price | Intra-Day Change | | 5.0 | 97.07 | -0.27 | | 5.5 | 99.45 | -0.22 | | 6.0 | 101.47 | -0.15 | **GNMA 30 yr** | Coupon | Price | Intra-Day Change | | 5.0 | 97.39 | -0.26 | | 5.5 | 99.73 | -0.13 | | 6.0 | 101.53 | -0.15 | **Treasuries** | Term | Yield | Price | Intra-Day Yield Change | | 2 yr | 4.224 | 99.812 | 0.050 | | 3 yr | 4.285 | 99.903 | 0.044 | | 5 yr | 4.382 | 99.969 | 0.053 | | 7 yr | 4.505 | 99.226 | 0.042 | | 10 yr | 4.663 | 99.696 | 0.034 | | 30 yr | 5.186 | 99.080 | 0.019 |

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