NMP reached out to Garth Graham, senior partner at STRATMOR Group, the day before his client, Union Home Mortgage, would announce its acquisition of Sierra Pacific Mortgage — marking yet another IMB transaction to shake the industry this year. It all began, he said, with record margins and retained servicing during the 2020 and 2021 refi boom.

“Then in 2022 and 2023, as margins collapsed and [lenders] needed cash, they sold that servicing,” Graham said. “This is the other thing that’s driving consolidation — the refinances that are coming back are primarily going to the lenders that bought those servicing MSRs in 2022 and 2023 from those that retained them in 2020–2021.”

When the Fed slashed rates by 50 bps points in 2024, over 50% of that refinance business went to the largest 10 servicers, including Rocket, United Wholesale Mortgage (UWM), Guild Mortgage, and Fairway Independent Mortgage, “who were basically refinancing their servicing book,” Graham said.

The buying and selling of MSRs has shaped the current map of borrower relationships, but technology will determine who wins the next wave of refinances when rates fall. JP Kelly, president of MeridianLink, warns that large servicing portfolios are only valuable for recapture when lenders use technology that “provides simplicity in the process — making it efficient.”

Large IMBs such as Fairway Home Mortgage are testing out new technologies to support its growing distributed retail team. Recently, Chief Operating Officer Len Krupinski said the company has explored using Agentic AI sales assistants for their loan officers, which has proven to be so efficient, he claims “companies [have] had to turn it off because they were getting so much business.”

Other consumer-direct IMBs have stated their intentions to build out end-to-end purchase funnels that bridge real estate and lending as well as other services onto one platform — similar to Rocket. Few have leaned into that transformation as aggressively as Lower, which is uniquely positioned as one of the nation’s largest venture capital–backed mortgage lenders.

Founder and CEO Dan Snyder is quickly assembling the pieces of his purchase funnel and, essentially, shopping his way into the top 25 lenders nationally. “You’re either going to be consolidated, or you’re going to consolidate. We’re going to be on offense,” Snyder said. “We’re not selling.”

Why Consolidation Keeps Accelerating

Drawing on STRATMOR Group’s data, Graham outlined a consistent relationship between profitability and deal volume: as earnings decline, mergers increase.

In 2020, when the average mortgage company earned about 150 basis points, there were just 13 deals. In 2023, when the average company lost 30 basis points, there were 38. “So there were roughly three times as many deals in 2023 in a down year than there were in 2020 during an up year,” he said.

The relationship holds even as profitability improves, Graham noted. “We are on pace to do 46 [deals] this year, which would be more than 2023 when mortgage companies were losing money — even though mortgage companies right now, on average, are not losing money.”

Roughly one in four lenders hasn’t posted a profit for two years, Graham said, leaving them under mounting pressure from warehouse banks and secondary market counterparties. “Even though it’s getting better, it might be, ‘I really need to look at what my options are, because it’s not getting better for me,’” he said.

But not all sellers are distressed. The industry’s largest players are pushing a wave of strategic, vertically integrated deals that blur the lines between mortgage, real estate, and servicing. Rocket’s acquisition of Redfin and Mr. Cooper is driving people to vertically integrate.

For smaller lenders, those questions have become impossible to ignore. Sellers are noticing formidable competitors and beginning to consider their options, while buyers are asking themselves, am I willing to match their growth?

The result, Graham said, is an M&A market defined less by distress and more by positioning. Lenders are deciding whether they’ll be part of the next growth cycle — or absorbed by it.

He pointed to the advantages of IMBs that maintain both origination and servicing scale, calling it “a balanced model” that helps firms survive multiple rate cycles. “It’s advantageous to have both,” he said. “They’re counter-cyclical. You make money on servicing during the tight markets.”

Lower’s Playbook

Snyder’s vision cuts against the grain of an industry that has spent years chasing scale through volume. While many lenders have pulled back, merged, or sold off servicing portfolios to stay afloat, Lower has doubled down on building a self-contained ecosystem designed to thrive in both purchase and refinance markets.

In less than a year, Lower has acquired an end-to-end LOS system from Neat Labs, purchased the real estate portal Movoto.com, and forged a marketing partnership with HomeSmart and its 25,000-agent network. The company has completed three major acquisitions and expects to fund roughly $6.5 billion to $7 billion in 2025 — with an eye toward becoming a top-10 lender within five years.

Lower’s M&A Timeline

• 2023: Lower became the exclusive lending partner for Opendoor and acquired Universal Lending’s wholesale channel, which was folded into the PowerTPO brand.
• 2024: Lower merged with Thrive, doubling its national footprint to 650 loan officers.
• 2025: The company acquired Neat Labs for its end-to-end origination software, launching LowerOS — what Snyder called “the foundation of our next chapter.” That same year, Lower purchased Movoto and parent company OJO Labs, bringing its total headcount to roughly 1,000 employees. A national marketing agreement with HomeSmart followed, extending Lower’s reach to 25,000 agents across 48 states and pushing the company closer to the top 25 lenders nationally.

But, to compete with giants like Rocket Mortgage, Snyder believes lenders need to own more than an efficient loan origination system — they need the entire ecosystem. “If you’re going to build the best platform, you say, well, how do you do that?” Snyder said. “Well, number one, you don’t have to, but it’s a heck of a lot easier if you own the technology.”

At the start of the year, Lower acquired Neat Labs — a firm that developed an end-to-end platform including point-of-sale, LOS, and pricing engine capabilities. That technology now serves as the foundation for LowerOS, a proprietary origination system slated to launch in 2026.

“Companies like Rocket that have their own system are in a spot,” he said. “They don’t have to pay millions and millions and millions of dollars to vendors. So for us, by controlling the ecosystem and the technology, you’ll have less cost per loan and your team’s more efficient.”

While Neat Labs is used to strengthen Lower’s backend, the purchase of Movoto.com, gave the company something equally valuable: consumer traffic. With roughly 140 million annual visitors, Movoto ranks among the nation’s top real estate portals — a digital bridge between consumers and real estate agents that now feeds directly into Lower’s network.

“With our platform, we control the top-funnel leads,” Snyder said. “Movoto spins off 750,000 to a million actual buyers a year, where our realtors are the customer.”

For Snyder, that traffic is the foundation of an offensive strategy. “Zillow is the big behemoth,” he said. “But they’re becoming more vertically integrated. They have their own real estate brokerage and their own mortgage company. So how do we own and keep control of that top of funnel? How do you protect and play offense? That was the question.”

It’s a preemptive attack, Lower is locking down real estate agent relationships before another lender can sweep in. But Movoto’s value isn’t purely theoretical. Snyder said that it’s already helping Lower attract high-volume real estate agents in new markets — what the company calls its “pillar producers.”

“We’ve got $50 million-plus producers joining us from Little Rock to Lexington,” Snyder said. “They want to be aligned with a modern, offensive-approach company like Lower.”

Plus, Snyder believes many real estate agents are drawn to HomeSmart’s 100% commission model, because “it’s arguably never been harder for realtors to make a living,” he said. “You’ve got to maximize that living, and I think that’s why HomeSmart, Fathom, eXp — they’re gaining a lot of market share because of that.”

HomeSmart’s 25,000 agents could potentially bring significant lead volume to Lower’s roughly 500 loan officers. If each agent sent one lead per month, that would equal about 50 leads per LO. As for the conversion rate on those loans, Snyder said he has not set hard expectations yet.

He explained that Lower plans to roll out the partnership market by market, starting with areas like Scottsdale and Phoenix, allowing agents and consumers to “get familiar with how we operate” and build trust first.

Technology As The Great Divider

JP Kelly, president of MeridianLink, says the lenders most likely to capture the next wave are those that already did their homework — investing in automation, workflow design, and the technology to “do more with less.” The companies that waited, he warned, will spend the next cycle scrambling for talent while the winners scale with technology.

The gap is not only defined by who owns data, Kelly said, but who knows what to do with it. He suggests that lenders can use servicing insights to predict when a customer is ready to make a move.

“If they can look at their data of where things are starting to move, that helps them identify where they need to focus their growth and point their marketing engines,” he said. “It helps them understand what products are going to be selling because of what price point and type of home that are there, and it’ll help them understand which products are going to be more profitable.”

MeridianLink, he explained, connects those data streams across multiple business lines. By tying those systems together, lenders can anticipate a borrower’s next move and respond in real time. “It gives your salesperson, the loan officer, the ability to be a true financial consultant for them,” Kelly said. “If the customer says yes, they literally can click a button that will then send the transaction to our consumer loan system. It will then fire out a loan offer to that borrower that they can complete online [and] submit it.”

Kelly added that origination systems offering AI support could become essential for handling high-volume surges. “In that last refi boom that we had, people were at 150% to 160% of their capacity of what they could handle,” he said. “They were spending ungodly amounts of money to have people work nights and weekends. It was a burnout pace like I’ve never seen before.”

Data and automation may be essential for gaining refinance business, but Graham contends the aggregator and online lead-gen models can’t easily replicate the community-based dynamics of purchase originations. “It’s less effective for purchase loans, because they tend to go local,” he said.

Agentic AI And The Human Touch

At Fairway Home Mortgage, Chief Operating Officer Len Krupinski says the company is testing a new class of technology known as agentic AI, which is a general term that refers to systems designed to act independently toward a defined goal, rather than simply respond to prompts.

Unlike traditional chatbots or scripted automations, Krupinski said agentic AI sales assistants can initiate borrower conversations, follow up across channels, qualify leads, schedule calls, and route opportunities to loan officers without human intervention. The systems are designed to operate continuously in the background, advancing loans through early-stage interactions while loan officers focus on relationship-building and closing.

In pilot tests, he said AI sales assistants are so conversational that some borrowers don’t realize they’re interacting with software. They’re so lifelike that “most people don’t even hang up because the conversation is going so well,” he said. “I’ve heard of companies doing this where they had to turn it off because they were getting so much business — there were too many leads coming in.”

That surge, he noted, wasn’t driven by a rate cut or pricing incentive, but by automation replacing traditional outreach. “In the past, there’s some branches that would hire dialers. These are basically like cold callers,” Krupinski said. “It’s like the cold caller’s almost being eliminated with this agentic assistant. And it’s having better results than the cold callers.”

While some retail lenders operate under national call-center models, such as loanDepot or Rocket Mortgage, Fairway’s ecosystem is rooted in branch-based loan officers, real estate agent partnerships, and local market expertise. “We’re 100% retail,” Krupinski said, meaning, “a lot of our reliance is on the loan officers staying in touch with their customers.”

That human-first principle is also guiding its push toward vertical integration. Krupinski describes the approach as a “one-stop shop for homebuyers.” The rebrand to Fairway Home Mortgage and the acquisition of Home.com are early steps toward that strategy. The site will serve as the hub for a digital home-buying journey that could eventually connect financing, insurance, and other homeownership tools under a single brand.

Fairway has already launched Fairway Home Insurance, giving borrowers a way to bundle coverage directly into the closing process. Like Lower, the company is also exploring ways for loan officers to earn additional income through cross-selling opportunities, creating multiple revenue streams within a single transaction.

“It’s not just technology replacing people,” Krupinski said. “It’s giving technology to people so that they can do their job better.”

The goal, he said, is to make the mortgage experience simple for the consumer and sticky for the lender. If Fairway can connect each borrower to more of their home-related services, it not only deepens the relationship but makes it harder for that customer to drift away when the next refinance cycle hits.

“If you do a good job for a customer and they really were impressed with how you treated them and how you made them feel, I don’t think there’s any technology that replaces that,” Krupinski said.

Poised For Profits

The mortgage M&A landscape is shifting from consolidation born of crisis to consolidation built on strategy. According to the Q2 2025 U.S. Mortgage Performance Report by Boston Consulting Group, merger activity is accelerating as companies “look to add capabilities in preparation for the next mortgage cycle” — even as profitability and origination volumes have stabilized.

Independent mortgage banks (IMBs) continue to gain share in both origination and servicing, suggesting that acquisitions are increasingly being used to capture scale and technology advantages rather than simply to stay afloat.

Today, M&A transactions are as much about defining future business models as it is about balancing the books. Some lenders are doubling down on vertically integrated platforms that connect real estate, lending, and servicing; others are focusing on automation and efficiency within existing footprints. Overall, the industry’s biggest advantage now lies in being ready for what comes next.