Mortgage shifts in 2026: three key trends impacting title companies

The mortgage market is rarely static, but the landscape entering 2026 presents a unique paradox for title professionals. We’re seeing a market that is grappling simultaneously with rising distress in specific sectors and budding opportunity in others. For title companies, this creates an environment where operational agility is paramount.

Understanding these distinct market themes is critical for title agencies looking to allocate resources effectively and capture market share.

ICE manages a leading repository of loan-level residential mortgage data and performance information covering the majority of the overall market. In addition, the company maintains one of the most robust public property records databases available, covering approximately 99.9% of the U.S. population and households from more than 3,100 counties.

ICE’s research experts carefully analyze this data to produce a summary supplemented by dozens of charts and graphs that reflect trend and point-in-time observations for the monthly Mortgage Monitor report.

Data gathered in the February 2026 Mortgage Monitor report highlights three specific trends — rising defaults, a rise in refinance activity and a shift in equity usage — that will directly influence order volume and workflow in the coming months. Read on to discover how these trends are shaping the title business and where opportunities for growth lie.

1. The gradual rise in default and foreclosure activity

After years of historic lows, the default landscape is shifting, with active foreclosures rising by more than 20% YoY — activity that needs to be monitored closely by title companies specializing in default services (Graph A).

For title companies, the implications are significant. This signals a growing pipeline of default title work, from initial foreclosure commitments to REO (Real Estate Owned) title services. Title companies that deliver truly end‑to‑end services may be positioned to capture greater market share, as lenders and servicers increasingly prioritize partners who streamline operations and reduce the number of vendors they must manage.

The "in the money" population

This rate shift has an outsized impact on refinance potential. In early January, approximately 4.8 million borrowers became "in the money" for a refinance — the highest level in nearly four years (Graph E).

The target demographic for these refinances is highly specific — a crucial consideration for title companies. The "rate and term" refinance market is dominated by borrowers who purchased their homes between 2023 and 2025.

Why these vintages? Because the most popular interest rate for homes purchased in recent years was between 6.875% and 6.99%. With rates dipping into the low 6% range, these recent homebuyers can shave meaningful amounts off their monthly payments. In fact, 95% of rate/term refinances in late 2025 came from borrowers refinancing out of 2023-2025 vintage loans. (Graph F)

Preparing for volume

And we’re already seeing the results from this rise in refinances with applications hitting a 17-week high in mid-January (Graph G). For title agencies, this means a potential influx of refinance orders. But these transactions often come with lower margins than purchase deals and require speedy delivery.

Lenders dealing with these volume spikes may prioritize title partners who can offer efficient, seamless integration. Title companies that can automate the setup and search process for these standard refinance transactions will be best positioned to capitalize on this "mini boom" without overextending their operational capacity.

3. The surge in second lien equity extraction

Homeowners’ utilization of equity is the third major trend impacting the title industry. After years of rapid growth, tappable home equity has begun to plateau as home price appreciation cools. However, the extraction of that equity is hitting multi-year highs.

Homeowners are increasingly turning to second liens (like HELOCs and home equity loans) rather than cash-out refinances to access their wealth. In Q3 2025, second lien equity withdrawals hit approximately $33 billion — the highest level since 2007 (Graph H).

Why second liens are winning

The logic for borrowers is simple: math. With first-lien mortgage rates still higher than the 3-4% rates many homeowners locked in years ago, trading a low rate for a higher one via a cash-out refinance is unappealing.

Conversely, the cost to borrow against equity via a second lien is falling. As Fed expectations shift and Treasury yields fluctuate, the monthly payment needed to withdraw $50,000 of equity has dropped by more than $100/month from recent highs (Graph I).

Second liens accounted for 59% of all equity withdrawals in Q3 2025 (Graph J). If the Federal Reserve moves forward with additional rate cuts later this year, the cost of HELOCs (which are often tied to prime rates) could drop further, fueling even more demand.