**WTMS Blog Today = What’s up in Mortgage Today (PM) – 05/13/2026**

Mortgage-backed securities staged a stunning intraday recovery after hotter-than-expected inflation data briefly sent markets reeling this morning. The April PPI report shocked traders with core wholesale prices jumping 1.0% month-over-month versus a 0.3% forecast, signaling persistent cost pressures that had bonds selling hard at the open.

Despite MBS falling nearly three ticks and 10-year yields spiking 4.3 basis points within minutes, the bond market found its footing and MBS ultimately finished the day trading positive territory. By 2:16 p.m., UMBS 5.0 printed at 98.22, up nearly one tick on the day, as traders reassessed the inflation shock. The persistent inflation picture means rates could stay elevated for longer than many borrowers hope.

Year-over-year PPI came in at 6.0% against a 4.9% forecast, with core PPI at 5.2% versus 4.3% expected, underscoring that cost pressures have not cooled as the Fed would like. This data represents the kind of behind-the-scenes pressure that keeps mortgage rates sticky higher and limits the rate relief cycles that were once possible. For mortgage sellers managing pipeline risk, this environment demands discipline on locking decisions and rate sheet positioning because volatility remains the dominant theme.

Geopolitical uncertainty continues complicating any lock-and-float strategy traders might attempt to employ. War-related headlines are driving wild swings in bond markets with no predictable schedule, making it nearly impossible to set fixed rules for risk management in the near term. Volatility spikes can happen at any moment independent of economic data, which means lenders should focus on protecting margins rather than timing perfect locks.

A peace deal would likely offer some benefit to rates from current levels, but until that occurs, brokers and originators must treat each day as a fresh test of client tolerance for uncertainty. Servicers are bracing for a wave of FHA delinquencies and foreclosures as the federal safety net fully unwinds and modification caps tighten significantly. April data showed FHA foreclosures surging 28% year-over-year in the first quarter as borrowers exhausted loss-mitigation options and balloon payments from deferred CARES Act balances came due simultaneously.

Property taxes, insurance costs, and returning student loan payments are colliding with weak equity positions for recent buyers, creating a squeeze that will disproportionately hit borrowers who received down payment assistance programs. Independent mortgage banks holding servicing portfolios face real financial risk if delinquencies accelerate, as they remain obligated to advance principal and interest to bondholders even as collections decline. The M&A battle between Two Harbors and UWM took another sharp turn as Two Harbors rejected UWM’s revised offer as “illusory, predatory, and unactionable.” With a $12-per-share all-cash deal from CrossCountry Mortgage on the table and a shareholder vote scheduled for May 19, the competitive tension is defining how mortgage companies are being valued in a challenging environment.

For originators watching this fight, the messaging about capital markets execution, balance sheet strategy, and servicing value provides a real-time case study in what Wall Street believes matters most. This deal drama will likely reshape consolidation expectations across the entire industry by signaling which acquisition partners offer credibility and financial stability. VantageScore 4.0 early comparisons are producing shocking spreads against traditional FICO scores, forcing loan officers to rethink credit box definitions and pricing strategy.

Mortgage Scoop reporting indicates some VantageScore-to-FICO variations are so extreme that they are causing double-takes among originators unaccustomed to managing that much credit score volatility. While widespread VantageScore 4.0 adoption is still months away, the early signals suggest the transition will be more disruptive than initially expected. Now is the time for lenders to stress-test their pricing, approval workflows, and client communication strategies for a credit score environment that behaves differently than anything experienced in the past decade.

**Locking vs Floating**

War headlines remain the primary driver of bond market volatility and make traditional lock-and-float strategies ineffective for near-term decision-making. Because geopolitical events do not follow an economic calendar and carry unpredictable timing, originators cannot build mechanical triggers or rules into their risk frameworks. A peace deal announcement would likely deliver meaningful rate benefit from current levels, but attempting to predict when that occurs is impossible.

Lenders should focus instead on protecting pipeline profitability and client communication clarity rather than trying to optimize timing around external political shocks.

**Today’s Events**

Core PPI m/m (Apr): 1.0% vs 0.3% forecast, 0.1% previous

Core PPI y/y (Apr): 5.2% vs 4.3% forecast, 3.8% previous

PPI m/m (Apr): 1.4% vs 0.5% forecast, 0.5% previous

PPI y/y (Apr): 6.0% vs 4.9% forecast, 4% previous

**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 |