A series of major mergers and acquisitions have raised eyebrows and anxiety industry wide. In under six months’ time,Mr. Cooper closed on its purchase of Flagstar Bank's third party origination (TPO) and servicing divisions, and then Rocket gobbled up Mr. Cooper's servicing mere days after absorbing Redfin's "nearly 50 million monthly site visitors" to point them toward Rocket's mortgage products. Everyone from independent mortgage banks and brokers to real estate firms can find cause for concern as the proverbial "big guys" keep getting bigger: From its own press release, Rocket says it "will bring its industry-leading mortgage recapture capabilities to a combined servicing book of $2.1 trillion across nearly 10 million clients, representing one in every six mortgages in America." Rocket describes the massive assemblage of services designed to capture and keep customers forever as "connecting traditionally disparate steps of the search and financing process with leading technology that removes friction." The rest of the industry sees it as a major play to remove their opportunities and repeat business. Rocket may be the modern-day Goliath, but the rest of the industry has a slingshot.
Combatting national ad campaigns and monster marketing machines is a daunting task; but IMBs, brokers, and their real estate partners need to look beyond the size and splash at consumer realities that can preserve their livelihoods and propel growth in this new market era. Findings from consumer insight global leader J.D. Power and others reveal a map forward for the lending industry:
- Loan Officers Matter: Power found that interpersonal relationships with local professionals are critical to customer satisfaction in the mortgage space. Power's Senior Director of Lending Intelligence Bruce Gehrke told National Mortgage Professional that, “Borrowers are looking for more individual interaction from their lender throughout the process. The preference for purely digital lending is declining. Borrowers are looking for a more advisory experience driven by lender expertise delivered through live representatives.” Power's 2024 Mortgage Origination Satisfaction Survey found that the biggest year-over-year declines in consumer satisfaction with the mortgage process were with the digital aspects, and that involvement with a local loan officer drove a 40% increase in overall satisfaction.
- Servicers Don't Dominate - Yet: Black Knight's April 2025 Mortgage Monitor says that servicer retention hit its highest level in nearly three years in Q424 at 30%. But servicers have struggled with low customer satisfaction ratings for years, consistently ranking far below car dealers. Of Power's 2024 findings, Gehrke said, "the data shows early signs of potentially serious challenges for servicers in the future. A proverbial ‘canary in the coal mine’ is the financial health of borrowers, which has materially declined in the past few years. At the same time, most borrowers are facing rising escrow costs that result in their total monthly mortgage payment increasing."
- Consider Costs: The idea that one-stop shopping saves money can be an illusion according to recent analysis of the Rocket-Redfin-Mr. Cooper merger in MarketWatch. The article cites Columbia Business School real estate professor Tomasz Piskorski and his co-authors who found "that when fintech mortgage lenders offered more convenience to borrowers, they charged a higher premium of up to 16 basis points, or 0.16%. That’s roughly an additional $640 on a $400,000 loan." Consumer Policy Center senior fellow Stephen Brobeck also noted that consumers who enter the consolidated platform labyrinths “...might be less likely to comparison shop," which bolsters mortgage brokers' value proposition.
Servicers have existed and had their sights set on your customers for years; the difference today is that they’re consolidating and becoming part of the flywheel of the home buying process. The assumption is that servicers now have more information that will make them more powerful and difficult to compete with. In reality, brokers and IMBs have access to the same information available to servicers and mega entities…they simply need to get their “data house” in order. InGenius can help with this…
Companies, teams, and individual loan officers need to use InGenius’ hyper-accurate, current data that goes back to January 1, 2019 to rehydrate their current databases to make sure their loan level data is correct. This is a renovation and database hygiene exercise for all originators; however, our LoanView Connect product can help you rebuild the databases of your new recruits to eliminate the hassles and potential legal issues associated with transferring client data. Once your loan level data such as name, address, closing date and product type is refreshed, InGenius’ can also match and append your customers’ personal emails and cell phone numbers, with a great deal of accuracy. Deploying a monitoring service will alert you to changes going forward to keep you apprised of actionable opportunities. These efforts give IMBs and brokers the same insights that servicers and mega platforms have.
It's understandable to react to the sheer size of some of these mergers, acquisitions, and consolidations with concern; but brokers and IMBs have the advantage of agility and flexibility over massive corporations. The "little guys" in the lending industry need to lean into their expertise and take advantage of data and tech to compete with the growing number of industry titans. They also must give the same level of priority and commitment to generating repeat and referral business as they do to filling and managing the pipeline, and there's plenty of tech and automation to help. Remember: The high water mark for servicer retention is 30%, and consumers want human, professional expertise to shepherd them through the biggest transactions most of them make in their lifetimes. Rather than seeing the latest M&A activity as a catastrophe, choose instead to heed the wake up call and aggressively seek opportunity.
It’s all right there in the data.
Jeff Walton is CEO of InGenius. With over 35 years in home mortgage and as a CEO and President of large national mortgage companies, Jeff is focused on helping the industry achieve high performance using actionable intelligence. Interested in learning more? Book an intro call with InGenius Data.
