WTMS Blog Today = What’s up in Mortgage Today (PM) – 01/16/2026
The afterglow of last week’s massive mortgage application surge is fading fast as bonds and MBS prices retreat. Mortgage applications jumped 28.5% last week, with refinance demand exploding 40% thanks to the Trump administration’s announcement of increased GSE MBS purchases. But today’s reality check has UMBS 5.0 coupons down 3 basis points to 100.15, suggesting rate improvements may be short-lived.
HUD’s proposal to eliminate the disparate impact rule in fair lending could reshape how lenders approach compliance. This Obama-era regulation allowed discrimination claims based on statistical effects rather than intent, essentially putting the burden of proof on lenders rather than prosecutors. The proposed change would require actual evidence of discriminatory intent, potentially reducing settlement risks for originators who face statistical anomalies in their lending patterns.
Manufacturing data from Philadelphia and New York Fed surveys shows economic strength that complicates the rate picture. New orders turned positive in both regions, though employment is moderating and profit margins appear under pressure. This mixed economic backdrop makes Fed policy decisions more complex, with markets now pricing only a 25% chance of a March rate cut.
Foreclosure activity continues its gradual normalization, with ATTOM reporting a 14% increase in filings during 2025. CEO Rob Barber emphasized this reflects market healing rather than distress, as activity remains “well below pre-pandemic norms and a fraction of what we saw during the last housing crisis.” The states seeing the highest activity—Texas, Florida, and California—are also major population centers with large lending volumes.
Locking vs Floating
Today’s weakness in bonds and MBS suggests caution for floating positions.
While GSE MBS purchases provide some downside protection, broader bond market bearishness and proximity to multi-year rate lows favor locking for risk-averse clients. The afternoon’s lack of repricing activity creates a more balanced risk profile, but Friday’s economic data and Fed speakers could still drive volatility.
Today’s Events
– Industrial Production (Dec): 0.4% vs 0.1% forecast, 0.2% previous
– Fed speakers: Collins, Bowman, and Jefferson scheduled
Bond Pricing
UMBS 30 yr
| Coupon | Price | Intra-Day Change |
| 5.0 | 100.15 | -0.03 |
| 5.5 | 101.35 | -0.03 |
| 6.0 | 102.32 | -0.04 |
GNMA 30 yr
| Coupon | Price | Intra-Day Change |
| 5.0 | 99.93 | -0.09 |
| 5.5 | 101.06 | 0.04 |
| 6.0 | 101.95 | -0.05 |
Treasuries
| Term | Yield | Price | Intra-Day Yield Change |
| 2 yr | 3.585 | 99.837 | 0.019 |
| 3 yr | 3.642 | 99.6 | 0.021 |
| 5 yr | 3.793 | 99.24 | 0.025 |
| 7 yr | 3.984 | 98.584 | 0.023 |
| 10 yr | 4.187 | 98.482 | 0.014 |
| 30 yr | 4.802 | 97.21 | 0.004 |
