Well That Makes Sense – WTMS Well That Makes Sense

“Damn, there is so much great knowledge out there. Did you know that “BOOKS” are full of smart?? No, I mean like life changing, I-wish-I-knew-that-years-ago type stuff.

I know that I was waaaayyy late to the game figuring it out. And I know that a lot of you are too busy to read as much as you ‘should’. And that is why you need me.

I still remember how it started for me. It started in June of 2008. After 11 years …..Click to continue

Mortgage Today (AM) - 03/23/26

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March 23, 2026

--- WTMS Blog Today = What's up in Mortgage Today (AM) - 03/23/2026 Bond markets whipsawed overnight after President Trump announced a five-day pause on strikes against Iranian energy infrastructure, citing progress in talks to reopen the Strait of Hormuz. The 10-year Treasury yield had surged to 4.443% by 6:45am before plummeting to 4.308% within minutes of the 7:04am announcement, ultimately settling around 4.354%. UMBS 5.0 coupons rallied 24 basis points to 98.39, while GNMA 5.0s gained 15 basis points to 98.72. Oil prices collapsed on the news, though some confusion remains as certain sources report no direct talks occurred with Iran, only intermediary discussions. The dramatic reversal pulled mortgage pricing back from the brink after what had been a brutal overnight session. Repricing Risk and Rate Reality Mortgage rates remain stubbornly elevated around 6.875%, with borrowers now fortunate to find anything near 6.375% after lenders repeatedly raised pricing throughout last week. March has been essentially a one-way trade against bonds with only brief corrective moments, as geopolitical uncertainty and inflation fears dominate market sentiment. The morning's rally offers some relief, but the volatility underscores how quickly conditions can shift based on Middle East developments. Lenders may issue improvement reprices today if current levels hold, though caution remains warranted given the whipsaw nature of recent trading. Fed Rate Hike Odds Climbing Bond traders now assign roughly 50% probability to a Federal Reserve rate hike by October, a dramatic shift from earlier expectations of continued cuts. President Trump's decision to engage militarily in the Middle East has convinced markets that inflation pressures will intensify rather than subside, fundamentally altering the policy outlook. Surging inflation expectations have widened TIPS breakeven spreads, reflecting growing concern about persistent price pressures ahead. Even with this morning's geopolitical reprieve, the underlying trajectory suggests rates may stay elevated longer than many anticipated. Softer economic data showing cooling GDP growth and weakening consumer spending could eventually counterbalance these concerns if tensions genuinely de-escalate. Agency Buying Activity Provides Support Both Freddie Mac and Fannie Mae are reportedly placing large orders to buy MBS, providing crucial support to mortgage-backed securities markets during this turbulent period. This buying activity helps explain why MBS spreads haven't blown out even wider despite the recent rate volatility. The GSEs' presence in the market offers some stability for originators trying to price loans amid rapidly changing conditions. However, this institutional support can only do so much against broader macroeconomic headwinds and geopolitical shocks. Originators should view this as a helpful backstop rather than a cure-all for current market challenges. Housing Market Fundamentals Weakening Buyer demand has dropped to record lows as elevated rates continue to suppress affordability across most markets. Home prices are declining in the majority of metros, signaling a potential shift toward a more balanced housing market after years of seller dominance. Persistent affordability challenges combined with structurally low housing inventory continue to cap upside potential in residential lending volumes. The industry remains constrained by these fundamental headwinds regardless of short-term rate movements. Any sustained improvement in mortgage rates would be needed to meaningfully revive purchase activity from current depressed levels. Private Credit Stress Building Stress in private credit markets continues to quietly build, with both investors and the Federal Reserve flagging risks tied to lending to weaker borrowers. These concerns previously helped push rates lower and could do so again if geopolitical tensions genuinely ease in coming weeks. The Fed's increased scrutiny of non-bank lending suggests policymakers are monitoring financial stability risks beyond traditional banking channels. Cracks in the economy including slower GDP growth and cooling labor markets may become a bigger focus for policymakers ahead. This week's economic calendar remains relatively light with mostly second-tier data, allowing geopolitical developments and Fed speakers to drive market direction. Locking vs Floating The current environment strongly favors locking rather than floating. Bond markets have traded in a predominantly negative direction throughout March with only brief corrective bounces. While this morning's rally on Middle East news provides temporary relief, attempting to time additional improvements amounts to catching falling knives in a treacherous market. Wait for dust to definitively settle before taking major risks with floating strategies. The only reason to float involves predicting future geopolitical outcomes, which carries substantial downside risk. Today's Events Construction Spending for January at 10:00 AM (Forecast: 0.1%, Prior: 0.3%) Bond Pricing UMBS 30 yr | Coupon | Price | Intra-Day Change | | 5.0 | 98.39 | 0.24 | | 5.5 | 100.32 | 0.24 | | 6.0 | 101.88 | 0.21 | GNMA 30 yr | Coupon | Price | Intra-Day Change | | 5.0 | 98.72 | 0.15 | | 5.5 | 100.4 | 0.2 | | 6.0 | 101.65 | 0.15 | Treasuries | Term | Yield | Price | Intra-Day Yield Change | | 2 yr | 3.867 | 99.301 | -0.038 | | 3 yr | 3.883 | 98.926 | -0.037 | | 5 yr | 3.981 | 98.963 | -0.027 | | 7 yr | 4.171 | 98.971 | -0.027 | | 10 yr | 4.354 | 97.155 | -0.029 | | 30 yr | 4.915 | 95.479 | -0.027 | Market Data

Mortgage Today (AM) - 03/06/26

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March 6, 2026

WTMS Blog Today = What's up in Mortgage Today (AM) - 03/06/2026 Oil prices are drowning out what should have been a rally day for mortgage bonds. February nonfarm payrolls crashed to negative 92,000 jobs versus expectations of a 59,000 gain, marking the widest miss in over a year. But instead of bonds rallying sharply as they normally would, UMBS 5.0 coupons are down 18 basis points and the 10-year Treasury yield has climbed 4 basis points to 4.176 percent. The culprit is crude oil's relentless surge following the complete halt of shipping through the Strait of Hormuz. Geopolitical tensions are triggering inflation fears that are overpowering weak employment data. When oil spikes this dramatically, markets worry about inflation returning even as the labor market softens. The jobs report showed unemployment ticked up to 4.4 percent from 4.3 percent, which somewhat offset the payroll disaster. Healthcare strikes distorted the February count according to the Bureau of Labor Statistics. Average earnings grew 0.4 percent versus the 0.3 percent forecast, keeping year-over-year wage growth at 3.8 percent. Bonds initially rallied at 8:30 AM when the data hit, with the 10-year dropping to 4.121 percent. By 10:09 AM that rally completely reversed as oil concerns reasserted control. This whipsaw action creates reprice risk for lenders still finalizing morning rate sheets. The 10-year Treasury yield has traveled from 3.93 percent at year-start to a high of 4.31 percent, now settling near 4.18 percent after closing near 3.95 percent just last Friday. That 20-basis-point move in four days is unusually fast and reflects broader market repricing. Options traders are increasingly betting the Fed won't cut rates at all this year. Freddie Mac's Primary Mortgage Market Survey shows the 30-year rate at 6.00 percent for the week ending March 5, up 2 basis points from the prior week's 5.98 percent low. That 5.98 percent marked the lowest level since September 2022. The 15-year rate fell 1 basis point to 5.43 percent. Better.com is shaking up underwriting with a ChatGPT-powered app that cuts approval times from 21 days to just 47 seconds. The tool automates dozens of underwriting checks and targets rivals like Rocket Mortgage and United Wholesale Mortgage. This technology could force the entire industry to accelerate digital transformation or risk losing market share. United Wholesale Mortgage launched temporary pricing incentives including a 75-basis-point discount on eligible refinance loans through March. They're also offering a $600 appraisal credit for eligible purchase loans through April. JPMorgan Chase simultaneously launched a limited-time rate sale through March 8 with personalized discounts that stack with other relationship pricing. Morgan Stanley is cutting 2,500 jobs across divisions including mortgage origination services for wealth clients. The layoffs span 3 percent of their workforce despite reporting $70.6 billion in revenue and $16.9 billion in net income for 2025. Geographic strategy shifts and performance considerations are driving the restructuring. Locking vs Floating Volatility risk remains much higher than normal due to geopolitical uncertainty and incoming economic data. Recent bond market weakness received minimal support despite today's catastrophic jobs miss. Only the most risk-tolerant clients should consider floating, while everyone else should wait for firmer evidence that the bleeding has stopped before making moves. Today's Events Average earnings for February came in at 0.4 percent versus 0.3 percent forecast. Non Farm Payrolls for February printed at negative 92,000 versus 59,000 forecast. Participation Rate for February dropped to 62.0 percent versus 62.5 percent prior. Retail Sales for January showed negative 0.2 percent versus negative 0.3 percent forecast. Retail Sales Control Group for January grew 0.3 percent versus 0.2 percent forecast. Unemployment rate for February rose to 4.4 percent versus 4.3 percent forecast. Bond Pricing UMBS 30 yr | Coupon | Price | Intra-Day Change | | 5.0 | 99.63 | -0.18 | | 5.5 | 101.2 | -0.07 | | 5.0 | 99.91 | -0.12 | GNMA 30 yr | Coupon | Price | Intra-Day Change | Treasuries | Term | Yield | Price | Intra-Day Yield Change | | 2 yr | 3.567 | 99.872 | -0.017 | | 3 yr | 3.6 | 99.719 | 0.004 | | 5 yr | 3.745 | 100.024 | 0.017 | | 7 yr | 3.951 | 100.298 | 0.027 | | 10 yr | 4.172 | 98.604 | 0.036 | | 30 yr | 4.797 | 97.282 | 0.043 | Market Data

Mortgage Today (PM) - 03/05/26

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March 5, 2026

WTMS Blog Today = What's up in Mortgage Today (PM) - 03/05/2026 The mortgage trigger lead industry ended today as the Homebuyers Privacy Protection Act took effect. Credit reporting agencies can no longer sell trigger leads unless the lender already originated or services that borrower's loan, or the consumer explicitly opted in. For originators who don't retain servicing, this eliminates a major lead source overnight and forces an immediate pivot to referral-based marketing strategies. Geopolitical chaos dominated bond markets as the Iran conflict pushed oil prices toward $83 per barrel. The 10-year Treasury yield broke through 4.10% and climbed to 4.14%, up 4.3 basis points on the day. UMBS 5.0 coupons dropped 19 basis points to 99.78, the worst single-day performance in two weeks. Energy price spikes are creating an unusual market dynamic. Markets are pricing in less Fed easing, with expectations dropping from 60 basis points of cuts last week to just 41 basis points by year-end. The 2-year Treasury jumped 23 basis points as traders bet inflation concerns will keep the Fed sidelined longer than previously expected. Nearly one million people were impacted by a phishing attack on Figure Technology Solutions, highlighting cybersecurity vulnerabilities across mortgage banking. The incident serves as a critical reminder that post-breach response matters more than the breach itself. Figure detected and contained the attack within one day, immediately notified regulators, and offered credit monitoring to affected consumers—actions that substantially reduce enforcement risk compared to slower responses. Historical data from recent mortgage industry breaches shows dramatic cost differences based on response speed. Bayview Asset Management and Flagstar Bank faced $46 million and $35 million in combined penalties respectively after slow detection and poor regulatory cooperation. By contrast, Mr. Cooper and LoanDepot detected breaches within 24 hours and faced significantly lower per-customer costs despite affecting 14.7 million and 16.9 million customers. Home relistings hit a record high in January with nearly 45,000 homes returning to market after being previously delisted in 2025. This represents 3.6% of all active listings and signals sellers are preparing for spring activity. The relisting surge suggests homeowners are testing pricing strategies as they navigate elevated mortgage rates that remain stubbornly high despite earlier optimism. The U.S. Navy torpedoed an Iranian warship near Sri Lanka in the first submarine attack on an enemy vessel since World War II. The IRIS Dena, nicknamed "Soleimani" after the Iranian general killed in 2020, had more than 170 people aboard. Sri Lankan authorities rescued 32 survivors while roughly 140 remain missing, intensifying concerns about prolonged disruption to the Strait of Hormuz oil shipping lanes. Treasury yields rose through higher real rates rather than inflation expectations, creating a puzzling market reaction. The 10-year inflation expectation stalled near 230 basis points even as front-end yields sold off sharply. This suggests markets view energy price spikes as a consumer tax that drags economic growth rather than fuel for sustained inflation, yet the Fed is priced for fewer cuts anyway. Challenger job cuts data showed U.S. employers announced 48,307 layoffs in February, down 55% from January's 108,435 cuts. Through February, employers announced 156,742 job cuts—the lowest January-to-February total since 2022. Morgan Stanley announced layoffs of 3% of its workforce as financial sector consolidation continues amid margin pressure. The yield curve continued its flattening trend for the 13th time in the last 15 sessions. This persistent flattening typically signals recession concerns, yet unemployment remains near historic lows. The disconnect between curve positioning and labor market strength creates uncertainty about whether mortgage rates will finally decline or remain elevated through 2026. Locking vs Floating Volatility risk remains much higher than normal amid geopolitical uncertainty and Friday's jobs report. Only the most risk-tolerant clients should consider floating based on Tuesday's brief support. Everyone else is waiting for firmer evidence that the bleeding has stopped before making rate commitments. Today's Events Challenger layoffs (Feb): 48,307K vs 108,435K prev Continued Claims (Feb 21): 1,868K vs 1,850K forecast, 1,833K prev Import prices (Jan): 0.2% vs 0.2% forecast, 0.1% prev Jobless Claims (Feb 28): 213K vs 215K forecast, 212K prev Bond Pricing UMBS 30 yr | Coupon | Price | Intra-Day Change | | 5.0 | 99.78 | -0.19 | | 5.5 | 101.28 | -0.09 | | 5.0 | 99.97 | -0.11 | GNMA 30 yr | Coupon | Price | Intra-Day Change | Treasuries | Term | Yield | Price | Intra-Day Yield Change | | 2 yr | 3.596 | 99.816 | 0.049 | | 3 yr | 3.612 | 99.686 | 0.054 | | 5 yr | 3.738 | 100.056 | 0.045 | | 7 yr | 3.929 | 100.43 | 0.057 | | 10 yr | 4.141 | 98.853 | 0.041 | | 30 yr | 4.75 | 98.015 | 0.018 | Market Data

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