**WTMS Blog Today = What’s up in Mortgage Today (AM) – 10/01/2026**
Bond markets are selling off without clear economic justification, with the 10-year Treasury at 5.303% after rising 56 basis points in September and MBS prices down roughly 0.25 points as investors grapple with technical and flow-driven selling rather than fundamental deterioration. UMBS coupons are mixed; the 6.5% coupon held at 100.66 with modest intraday gains, while lower coupons like 5.5% slipped to 95.22, reflecting the bear-steepening yield curve and duration-driven losses. GNMA prices track similarly with the 6.0% coupon at 98.26 and the 6.5% holding near par, though the broader market momentum favors waiting for a stronger technical rally before adjusting lock-float strategies.
Economic data delivered conflicting signals that failed to arrest the selloff: jobless claims improved to 197,000, continuing claims at 1.701 million, core PCE undershot expectations at 3.0%, yet personal spending surged and Q2 GDP revised sharply higher to 2.2%, none of which shifted market direction meaningfully. The yield curve continued its bear-steepening trajectory with the 2s10s spread at roughly +40 basis points, a structural headwind for mortgage spreads as duration rather than credit risk drove the session. Hedge strategies focusing on options protection, such as CME Eris Options, are becoming increasingly critical as mortgage companies navigate basis risk between warehouse inventory and uncertain secondary market valuations.
New York Life Investment Management is taking majority control of Invictus Capital Partners, the company behind Verus Mortgage Capital, signaling substantial institutional capital flowing into the non-Agency space despite rate volatility. Verus is on track for its biggest securitization year with approximately $8.9 billion across 14 deals in 2026, demonstrating resilient investor appetite for residential mortgage credit outside the Agency channel. This institutional consolidation mirrors broader market trends where lenders are shifting focus toward non-QM and DSCR lending as Agency margins compress and secondary market opportunities stabilize.
Federal Housing Finance Agency Director Bill Pulte announced that Fannie Mae and Freddie Mac will consolidate to a single pricing grid incorporating VantageScore alongside FICO Classic scoring, effective immediately for new lenders applying to the program. The GSEs also granted a temporary exception to the November 2 Uniform Appraisal Dataset 3.6 deadline following MBA concerns about ecosystem readiness, pushing compliance pressures back for originators managing appraisal workflows. These policy shifts underscore ongoing modernization of GSE credit frameworks, which directly impacts origination economics and title and settlement operations nationwide.
Mortgage technology companies are racing to address operational friction in non-Agency lending, with Friday Harbor launching AI-powered pre-underwriting for DSCR and investor loans, while Newfi partners with Addy AI to automate decision-making and streamline operations. LoanPASS AUS launched to provide deterministic, rules-based automated underwriting for loans outside traditional Agency platforms, targeting the complex documentation issues that derail files before formal underwriting reviews. These automation investments signal that lenders treating non-QM as a strategic channel—rather than a niche product—are gaining structural advantages in cost control and speed-to-close.
Spec pay-ups continue deteriorating with no clear bottom, declining 0.50 to 0.70 in implied value since late August, forcing capital markets teams to recalibrate pricing strategies before losses materialize on profit-and-loss statements. Loan officers building relationships with investor borrowers and self-employed earners will command premium margins as institutional capital seeks seasoned operators with established portfolio flows and demonstrated servicing expertise. The convergence of technology automation and investor portfolio growth is reshaping origination fundamentals: those who build repeatable workflows today will own the non-Agency channel when rate normalization returns.
**Locking vs Floating**
Markets remain structurally challenged without clearer economic signals to justify a sustained rally. Maintain a neutral lock-float position until bond prices demonstrate an appetite to recover on their own merit rather than simply bouncing from oversold technicals. If weak economic data materializes alongside a bond recovery, expect meaningful mortgage rate compression, which justifies patience over aggressive rate locks.
**Today’s Events**
Continued Claims (Sep/19): 1,701K vs 1,730K forecast, 1,719K previous
Jobless Claims (Sep/26): 197K vs 200K forecast, 197K previous
September S&P Global U.S. Manufacturing PMI
August Construction Spending
September ISM Manufacturing Index
Fed Presidents speaking: Barkin, Collins, Schmid, Waller, Jefferson, Bowman, Williams, Cook, Logan
Treasury bond buyback (up to $6 billion announced)
**Bond Pricing**
**UMBS 30 yr**
| Coupon | Price | Intra-Day Change |
**GNMA 30 yr**
| Coupon | Price | Intra-Day Change |
**Treasuries**
| Term | Yield | Price | Intra-Day Yield Change |
**UMBS 30-Year**
| Coupon | Price | Intra-Day Change |
|:—:|:—:|:—:|
| 5.5 | 95.22 | -0.18 |
| 6.0 | 98.04 | 0.02 |
| 6.5 | 100.66 | 0.10 |
**GNMA 30-Year**
| Coupon | Price | Intra-Day Change |
|:—:|:—:|:—:|
| 5.5 | 95.52 | 0.02 |
| 6.0 | 98.26 | -0.03 |
| 6.5 | 100.40 | 0.08 |
**U.S. Treasuries**
| Term | Yield | Price | Intra-Day Yield Change |
|:—:|:—:|:—:|:—:|
| 2-Year | 4.869 | 99.775 | -0.03 |
| 3-Year | 4.988 | 98.312 | -0.013 |
| 5-Year | 5.091 | 99.604 | -0.002 |
| 7-Year | 5.205 | 98.812 | 0.016 |
| 10-Year | 5.315 | 94.703 | 0.028 |
| 30-Year | 5.673 | 92.151 | 0.040 |
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