{"id":47626,"date":"2026-03-19T23:21:30","date_gmt":"2026-03-19T20:21:30","guid":{"rendered":"https:\/\/mk.gen.tr\/optimal-blues-mike-vough-on-borrowers-staying-rate-anchored-into-2026\/"},"modified":"2026-03-19T23:21:30","modified_gmt":"2026-03-19T20:21:30","slug":"optimal-blues-mike-vough-on-borrowers-staying-rate-anchored-into-2026","status":"publish","type":"post","link":"https:\/\/mk.gen.tr\/tr\/optimal-blues-mike-vough-on-borrowers-staying-rate-anchored-into-2026\/","title":{"rendered":"Optimal Blue\u2019s Mike Vough on borrowers staying rate anchored into 2026"},"content":{"rendered":"

Borrowers are still anchored to ultra-low, pandemic-era mortgage rates<\/a>, a mindset that is influencing both purchase and refinance trends as the market heads into 2026.<\/p>\n

That\u2019s according to Mike Vough, Optimal Blue<\/a><\/strong>\u2018s senior vice president of corporate strategy, who highlighted the company\u2019s latest Market Advantage report<\/a> in a conversation this week with HousingWire<\/strong> at the Intercontinental Exchange<\/strong> ICE Experience (X26) conference in Las Vegas.<\/p>\n

Vough discussed the impact of rate sensitivity on borrower behavior, the importance of managing risk in a volatile market, and the trends in nonqualified mortgage (non-QM<\/a>) and debt-service-coverage ratio (DSCR<\/a>) lending that are shaping the 2026 mortgage environment.<\/p>\n

Editor\u2019s note: This interview has been edited for length and clarity<\/em><\/p>\n

Sarah Wolak: Given that the latest Market Advantage report is out, I wanted to talk about the current state of purchase and refinance activity. What is driving that activity on a macro level?<\/strong><\/p>\n

Mike Vough:<\/strong> I think it\u2019s interesting in the February market report, you actually saw refinance<\/a> share drop. So in January, it was closer to, like, 44% of the locks, but at the end of February, it was 41%. Now, the reason why that is, we see rates end the mortgage market index at 5.9%. That\u2019s a psychological barrier for folks. And then we also saw our percentage share of ARMs hit a recent high of 10%. <\/p>\n

So with those low rates and ARMs<\/a> in mind \u2014 where if you squint, you\u2019re getting something like a 5.25% rate \u2014 that\u2019s helped support some purchase activity. On top of that, we\u2019ve seen volatility-driven behavior. People who locked in the last few days may want to renegotiate, especially with how much rates have moved recently. Of course, activity happening overseas<\/a> is also a factor.<\/p>\n

Wolak: A lot of people have been talking about the psychological factors influencing borrower behavior right now, and it sounds like borrowers are still very rate sensitive, despite loan officers telling them that you can still lock in at a low-6% rate. Why do you think that narrative is persisting?<\/strong><\/p>\n

Vough:<\/strong> I think it\u2019s hard to let go of a 2% or 3% rate. At this point, it takes a life event, such as your family expanding, debt<\/a> or even a death<\/a>. I think there\u2019s this COVID-19 time warp that people are dealing with too. It doesn\u2019t seem that far away, but it\u2019s been six years now. \u2026 These American homeowners are still grounded to those low rates and think that is the norm.<\/p>\n

But when borrowers are on the fence or thinking about refinancing, there are so many factors to consider. The monthly payment<\/a> savings have to outweigh the transaction costs. There\u2019s a lot to consider that makes this hurdle harder to jump over.<\/p>\n

Wolak: In the latest report, you said that lenders are paying close attention to how they execute and manage risk. Could you expand a little bit on why?<\/strong><\/p>\n

Vough: <\/strong>Things are so competitive, and because margins<\/a> are still really tight \u2026 lenders are making less compared to the 125-bps norm during COVID. And so, they need to be more conservative. <\/p>\n

But when there\u2019s volatility, it makes hedging more expensive. \u2026 If it also expands, they need to buffer their margins a little bit. When hedge costs increase, lenders need to buffer their margins, but at the same time, they can\u2019t price themselves out of the market.<\/p>\n

Wolak: I also wanted to ask about the rise in MSRs that Optimal Blue observed.<\/strong><\/p>\n

Vough:\u00a0<\/strong>This has been really interesting to watch because, for the last two months, typically, when rates drop, the servicing valuations<\/a> that we see in the marketplace should also drop, because prepayment risk increases.<\/p>\n

But what\u2019s been interesting, and this is a little bit of a theory, is I think what we\u2019re seeing is the appetite for retention being reflected in valuations. So when people are pricing servicing, they may be pricing in one time through, or two or three times through that relationship.<\/p>\n

Wolak: That\u2019s interesting. I heard something similar at the recent MBA servicing conference<\/a> \u2014 that M&A<\/a> is shifting toward vertical integration, where companies want to own more of the borrower relationship.<\/strong><\/p>\n

Vough:<\/strong> That\u2019s exactly right. Firms want to control more touch points across the loan lifecycle. And while they\u2019re [trying to do] that, they\u2019re also opening up technology considerations. So if I\u2019m a lender and I\u2019m using a subservicer<\/a>, and that subservicer is owned by another lender, that creates tension. Do I want that relationship? Do I risk losing it? But from the borrower\u2019s perspective it\u2019s just, where does my payment go? What portal do I log into?<\/p>\n

Wolak: Switching gears \u2014 what are you watching right now with origination trends?<\/strong><\/p>\n

Vough:<\/strong> Last year was kind of a high-water mark for non-QM. \u2026 It was part of almost every underwriting<\/a> strategy. This year, we\u2019ve actually seen that tail off a little bit in the first two months. <\/p>\n

And then there\u2019s also stuff happening in private credit<\/a>. Some headlines from big Wall Street firms\u2014 questioning if there\u2019s stress there. I don\u2019t think it\u2019s directly impacting things yet, but if that continues, it could trickle down into less availability of credit for those borrowers.<\/p>","protected":false},"excerpt":{"rendered":"

Borrowers are still anchored to ultra-low, pandemic-era mortgage rates, a mindset that is influencing both purchase and refinance trends as the market heads into 2026. That\u2019s according to Mike Vough, Optimal Blue\u2018s senior vice president of corporate strategy, who highlighted the company\u2019s latest Market Advantage report in a conversation this week with HousingWire at the…<\/p>","protected":false},"author":0,"featured_media":0,"comment_status":"open","ping_status":"open","sticky":false,"template":"","format":"standard","meta":{"inline_featured_image":false},"categories":[1],"tags":[],"_links":{"self":[{"href":"https:\/\/mk.gen.tr\/tr\/wp-json\/wp\/v2\/posts\/47626"}],"collection":[{"href":"https:\/\/mk.gen.tr\/tr\/wp-json\/wp\/v2\/posts"}],"about":[{"href":"https:\/\/mk.gen.tr\/tr\/wp-json\/wp\/v2\/types\/post"}],"replies":[{"embeddable":true,"href":"https:\/\/mk.gen.tr\/tr\/wp-json\/wp\/v2\/comments?post=47626"}],"version-history":[{"count":0,"href":"https:\/\/mk.gen.tr\/tr\/wp-json\/wp\/v2\/posts\/47626\/revisions"}],"wp:attachment":[{"href":"https:\/\/mk.gen.tr\/tr\/wp-json\/wp\/v2\/media?parent=47626"}],"wp:term":[{"taxonomy":"category","embeddable":true,"href":"https:\/\/mk.gen.tr\/tr\/wp-json\/wp\/v2\/categories?post=47626"},{"taxonomy":"post_tag","embeddable":true,"href":"https:\/\/mk.gen.tr\/tr\/wp-json\/wp\/v2\/tags?post=47626"}],"curies":[{"name":"wp","href":"https:\/\/api.w.org\/{rel}","templated":true}]}}