After
Mergers and acquisitions have increased as a result, with notable moves including Rocket's purchase of Mr. Cooper and Redfin, CrossCountry's acquisition of TwoHarbors and Bayview Asset Management's addition of Guild Mortgage.
"Mergers and acquisitions are picking up again pretty rapidly," Hale said. "I think some companies are ready to capitulate in the process."
This consolidation at the top has fed into the trend of larger lenders taking more of the market share.
Hale, who has spent 45 years in the industry, said one of the most undertalked about topics in the field has been the oversaturation, which may get sorted by some lenders' reluctance to adapt.
"You have to be able to evolve," the CEO and founder of Mortgage Advisory Partners said. "Now, evolution is going to accelerate at superhuman levels. And in that, many lenders are not equipped."
This interview has been edited and condensed.
How has the mortgage industry changed from when you first entered it?
Hale: The functions of the industry have changed a lot due to technology, scaling and regulation.
The part that is the same is that great sales people drive the industry, but one change is that the industry has consolidated rapidly in terms of market share. That's somewhat true for the street level originator. There's about 125,000 licensed originators in the United States today, the top 30,000 are the dominant share players. The bigger, talented and organized sales people and companies are gaining share at the detriment of everybody else.
The two most significant impacts to the mortgage business are interest rates and the regulatory environment in which we operate, and for the most part, we have zero control of either. That's been true since the first day I was in the business to today.
What aren't people talking about enough?
Hale: There's overcapacity in the industry. A lot of lenders came into 2026 thinking this was going to be a better year. But over the last five or six weeks, with the conflict in Iran, the price of oil, the potential for inflation and mortgage rates have all gone up. I think 2026 is going to be a very tough year, maybe 2027 too.
The current administration is focused on loan officer compensation, which is still a huge cost for the industry, and Real Estate Settlement Procedures Act reform. What gets the headlines is when Bill Pulte comes out and suggests a 50-year mortgage, or that Fannie Mae and Freddie Mac should go public. They are not going public anytime soon, and when the administration looks at its priorities, it's not in the top 10.
What is the biggest problem facing the mortgage industry?
Hale: Complacency. If you own or run a mortgage company today, every single thing around you is changing at the speed of light. Each evolution of these AI models is so over the top and better than the last model seven months ago. You can't take the same old, same old approach.
If you embrace the future, that's also a risk. Do you have the technology, people, leadership and the senior teams' complete embrace of the technology?
How do you avoid complacency and the risk associated with embracing the future?
Hale: Every executive has to be up to their eyeballs, engaged in every step of the way. You can't delegate this to your IT group and go, "Oh, this will work out."
People buy a bunch of technology and then go, "Well, let's hook it all up and it'll be better." Often it's not, and they just spent $40 million trying it. You have to start with what's the process in mind? What's the technology that will enable it? Do we have the talent required to find the right execution? And then, do we have the courage to see the change through?
It's technology, people and process. It's putting those three things together so that you have a compelling value proposition to attract great originators and customers and reduce friction in the process.
What are your thoughts on the CFPB eliminating federal oversight of disparate impact?
Hale: I've always believed that good lenders follow the law. It's really bad for your reputation to be discriminatory. If you want to build a business around the idea that we take advantage of people who don't understand the system, either because they're uneducated, or their race, or their national origin, or their sexual orientation, it's a foolish business plan.
At the same time, some of the statistical approaches that regulators have taken in the past have been ultimately misguided and created immense cost and concern, and actually ended up costing consumers more over time because of the underlying cost of compliance.
What are your thoughts on Fannie and Freddie accepting VantageScore 4.0?
Hale: I'm a believer in competition, so if Fair Isaac Corp. had a competitor like VantageScore, it would make both companies better.
There's a lot of commentary on the internet that these guys are abusing the consumer and the industry because they've raised their prices. Credit cost on a closed loan is typically less than 2% of the total closing cost. So whether it's $100 or $35, it's not really impacting the individual consumer.
Where companies are impacted with these far higher costs are when a loan officer is pulling the credit on 400 customers to close two of them. Now the cost of your credit reports on those two loans that closed are through the roof. But what that really is is a lack of management by the mortgage company of how and when they allow people to pull credit.
Between VantageScore and FICO, I don't have an opinion. But most companies' loan origination systems are not set up for VantageScore, so it's going to be a while.
What does the consolidation of the largest lenders mean for the industry?
Hale: I think what that signals is we're somewhere close to the end of the down cycle of the mortgage business, because typically well capitalized or publicly traded companies try to pick up market share and prepare additional scale as we move into a better period.
If you look at Redfin, Rocket and Mr. Cooper, they have a distinct advantage going forward. Redfin brings them 50 million searches a month. Mr. Cooper is a great servicer and a great retainer of servicing. You add that to Rocket, who has a low-cost sales force compared to the industry, which means they can thin out their prices, good technology and great marketing. They have all the pieces you would want to have.
If you're a good originator and you're good at retaining your servicing, you have a huge advantage. But some mergers in the mortgage industry have often not worked out because of a clash of cultures.
What's the best piece of advice you've ever received?
Hale: One, until somebody sells something, everybody else can go home.
Two, maintain your integrity. I've never seen a mortgage worth me going to jail and wearing an orange jumpsuit.
Three, be excruciatingly financial. In the mortgage business, almost all the answers are in the numbers.
Four, great people make great companies. You have to focus on talent, and talent that can work together as a team where there are no agendas.
Lastly, there's no easy button in the mortgage business. It's an excruciatingly difficult business with a lot of moving parts and fairly low margin, so you have to do lots of widgets to make some money.
