Mortgage Experts Predict 2025 Trends and Strategies for Lender Success
What to expect and how to optimize your lending operations in the new year
Steven Smith
Chief Executive Officer and Co-Founder of BaseCap Analytics
In a roundtable discussion among mortgage industry experts, BaseCap discovered some of the key pressures facing lenders around qualifications, housing affordability, and technological change.
The motto for lenders in 2024 has been “survive until 2025.” But our motto for the new year can’t just be about survival. It’s time for the industry to become more proactive about addressing borrower demands, cutting out inefficiencies, and creating new revenue streams.
From navigating a normalized interest rate environment to addressing affordability pressures and evolving borrower needs, the panel shared insights into how lenders can not only survive but thrive in 2025. And these insights go beyond residential mortgages. Commercial and multi-family markets are facing the same market pressures and can benefit from the same solutions that are driving growth for residential lenders today.
Watch the full webinar here.
Christy Soukhamneut
Chief Lending Officer, UFCU
Taylor Stork
Chief Operating Officer, Developers' Mortgage
Cat Kaiyoorawongs
CEO & Founder, LoanSense
Here’s what the experts had to say.
2025 Mortgage Market Observations
Normalized interest rates
While there is heavy anticipation in the industry for rate cuts, the historical trendlines show that the nation’s mortgage rates have largely stabilized. Taylor Stork noted, “We’ve been in a nearly 20-year decline in interest rates,” he noted. “Since 2001, rates have trended downward except for a few spikes. Where we are today is a normalized interest rate environment.” He added that while there is hope for continued rate cuts, “I don’t see that as particularly likely.”
Considering the next presidential administration, Christy surmised, “You implement tariffs, and you reduce taxes…you’re looking at pressures of upward inflation, and when we have upward inflation, Jerome Powell can’t keep cutting interest rates.”
“Historically, interest rates sit between 5 and 7% for real property. And so we are right there in that band. And we’ll probably stay in that band.”
– Taylor Stork
Shrinking Borrower Pool
One trend that will likely continue in 2025 is the declining number of borrowers who will qualify for loans. The panelists offered several explanations for this trend.
Cat Kaiyoorawongs pointed to the impact of 9 million people entering student loan repayment: “They’re going to take a lot of credit hits, and we’re going to see a downward shift in credit scores, which obviously impacts their ability to buy.” But student loans are not the only debt affecting borrowers. Cat also called out that “the highest-growing amount of debt is in parent PLUS loans—parents taking out six figures for their children’s education, which threatens retirement and impacts those downsizing or buying a second home.”
Christy agreed that the debt landscape is limiting the lending pool. “The average non-mortgage debt, according to LendingTree, across the 50 largest metro areas is almost $38,000,” she said, “That is up dramatically.” Other factors borrowers are rising property taxes and insurance costs. Due to these pressures, Christy predicts that “the pool of eligible borrowers is going to shrink, even if they’re in the money from an interest rate standpoint.”
Taylor expanded on this issue, pointing out an overlooked opportunity. “The average debt among borrowers in metro areas is $38,000, but many are in the $70,000 to $100,000 range. These borrowers need thoughtful guidance from professional originators to restructure their debt effectively.”
“Prime credit score borrowers—69%, or two-thirds of Americans—hold revolving balances on their credit cards, driving up debt and impacting their ability to refinance or buy.”
– Cat Kaiyoorawongs
Refinance and Purchase Markets
“The ReFi fairy is not coming,” Christy cautioned, explaining, “refinances used to be the icing on the cake, and the cake was your purchase business. Well, today, we’re not going to get that extra scoop of icing.” This sobering assessment was shared by the other panelists, with Cat adding, “If you’re a homeowner interested in refinancing, getting your property taxes reassessed is an important tool to help manage costs. Many people don’t do it, but it can significantly lower your tax burden.”
Taylor held that the purchase market holds more promise than refinances. Nonetheless, he said, “there is a significant, overlooked opportunity for real financial support and planning and guidance for customers who need thoughtful support by professional originators.” The focus on relationship building and client recapture proved a prominent theme of the roundtable.
“The real business is the purchase business. We’re going to continue to see housing prices appreciate and a strong drive toward homeownership.”
– Taylor Stork
Growth Strategies in a Tight Market
With these challenges and trends in mind, each of the panelists offered valuable wisdom about the strategies and tactics that will drive growth in 2025.
Christy’s Growth Strategies
Christy noted the industry’s overreliance on realtors and builders for referrals. “We need to diversify our referral sources,” she advised. “Builders, CPAs, insurance agents, and even divorce attorneys should be part of your network.” The importance of servicing loans also came into focus. Christy shared from her experience at UFCU, “If we’re not engaging with borrowers regularly, we lose them to competitors. Good servicers maintain recapture rates of 70–90% because they build ongoing value for borrowers.”
“I love our internal AI that we use that can help me do tasks and make me more efficient and more impactful in my day-to-day role.”
– Christy Soukhamneut
Cat’s Growth Strategies
Cat stressed the value of borrower education, particularly as the sales cycle lengthens. “Providing guides or educational content for borrowers preparing to buy is a great way to build trust and stay top-of-mind,” she said. As customer trust and loyalty become more influential factors in lenders’ success strategies, new technologies become an important enabler. For instance, Cat mentioned how “technology can streamline tedious tasks like document management, allowing mortgage professionals to focus on decision-making rather than managing rows in Excel.” Better-informed business decisions, automated processes, and high-quality data will be essential to growing customer lifetime value.
Leave menial tasks like manual data validation in the dark ages where they belong. Learn more about intelligent document processing in the mortgage industry.
Taylor’s Growth Strategies
Taylor offered empathy for lenders and servicers: “The mortgage industry, almost by definition, is a chaotic business because we have constantly changing guidelines, constantly changing implementation and enforcement of regulations, with constantly changing environments.” He emphasized a personal approach to growing business. “You gotta get out and shake hands,” Taylor said, “You gotta look people in the eye because the difference between you and xyz.com is the fact that you can…reassure them that you’re gonna take care of their unique, special, unlike-anybody-else transaction and that their family is gonna have a nice, safe place to sleep at night.”
Tips For Lender Success in 2025
So, how can lenders position themselves for success in 2025? Here are the panel’s key takeaways:
Adapt to the New Normal
Embrace strategies that are agnostic to interest rate changes. Focus on lending in all environments, not just when rates are low.Provide Holistic Financial Support
Offer debt management guidance and structure products like HELOCs to meet borrowers’ evolving needs.Diversify Referral Sources
Build relationships with professionals outside the traditional realtor and builder networks.Engage with Borrowers Regularly
Whether through servicing or educational content, maintain consistent communication to stay top-of-mind.Leverage New Technology
Modernize outdated processes and enhance borrower relationships by deploying advanced technology at every level of the business.
As the industry moves toward 2025, lenders who prioritize adaptability, innovation, and borrower-centric strategies will be best positioned to succeed.
Technologies Driving Growth in Mortgage
The panelists demonstrated appreciation for new technologies that are enhancing mortgage workflows and caution for the use of AI to “replace” current processes. But between carbon copy paper and artificial intelligence, there are myriad tech solutions that the industry has only begun to adopt that are driving strong results for those who do.
Some of the key technologies driving growth in mortgage lending include:
Intelligent Document Processing
The inefficient method of manually entering data found in payment letters, forms, and notes has long distracted lending professionals from tasks that improve borrower relationships. Optical character recognition combined with advanced data validation software can fully automate the extraction of data from documents, speeding up workflows and improving data quality.
QA Automation
Staring and comparing spreadsheets and document data is a task best left in the dark ages. Yet, most lenders and servicers still utilize manual quality assurance processes to some degree. Using QA automation software to automate data checks removes human error and greatly increases efficiency.
Full Data Visibility
It’s one thing to know that the data in your systems are complete and accurate; it’s another to be able to ask questions about your data, like “Which borrowers in my loan pool are active-duty service members?”. Solutions that make data more accessible and query-able allow mortgage companies to make better-informed decisions that significantly impact operational efficiency and borrower relations.
TLDR
Mortgage industry experts discussed strategies for lenders to navigate a landscape shaped by stabilized interest rates, shrinking borrower pools, and evolving borrower needs. The panel emphasized adapting to normalized rates, with experts like Taylor Stork noting that rates are unlikely to fall below historical averages of 5-7%. Rising non-mortgage debt, including student loans and parent PLUS loans, coupled with higher property taxes and insurance costs, is tightening the pool of qualified borrowers. The experts highlighted the importance of proactive debt management and personalized financial support to address these challenges effectively.
To thrive, lenders must prioritize borrower engagement, diversify referral sources, and leverage innovative technologies like intelligent document processing and QA automation. Panelists advocated for building trust through borrower education and maintaining regular communication, emphasizing that technology should enhance, not replace, relationship-building efforts. Growth strategies also include modernizing workflows, developing referral networks beyond traditional realtors, and fostering loyalty through consistent servicing. As 2025 approaches, adaptability, innovation, and a borrower-centric approach are key to lender success in a competitive market.
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