By Geno Paluso, CEO, Sagent
As we enter the second half of 2025, mortgage markets, regulations, and technology are all moving faster than ever. On top of all this, select M&A deals are resetting how lenders acquire and retain customers. So as a mid-year checkup, below I address these strategic topics, and share some takeaways we at Sagent discuss with our mortgage servicing customers as we keep them ready for anything this volatile era may throw at them.
The Ultimate Acronym For Managing Change
When markets, regulations, and technology move this fast, managing change is always the top priority.
When I sense change fatigue at Sagent, I remind our team that if you dislike change, you're going to hate irrelevance.
An impactful framework we use for managing change is VUCA, which is an acronym for Volatility, Uncertainty, Complexity, Ambiguity.
I believe that if teams and organizations embrace that we live in a world of VUCA, we can better:
- Anticipate problems and opportunities
- Connect dots on how different problems and opportunities interrelate
- Prioritize how to tackle these problems and opportunities
- Understand intended and unintended consequences of our actions
To do this really well, teams should go a bit slower. And as I tell our teams: Slow is smooth, and smooth is fast.
With that, let's review the fast state of the mortgage sector, starting with regulations.
Policy Volatility Is A Feature, Not A Bug
MBA President & CEO Bob Broeksmit said last month on a stage that he's asked constantly when things are going to calm down in Washington. His response:
"Disruption is a feature, not a bug. This method of governing is intentional."
Talk about a good time to embrace VUCA!
Most 2025 policy so far impacting mortgage servicing has been to unwind pandemic relief programs and revert back to a pre-pandemic state.
This means servicers must be on-time-compliant with lots of policy change deadlines. And just like Sagent-powered servicers never missed a policy change deadline during the rapid-fire pandemic policy era, our nimble platforms ensure they won't miss a go-live deadline in this era either.
Another policy volatility factor we're watching closely for servicers is how state vs. Federal AI regulation is playing out in 2025.
Servicers must be compliant with all state and Federal regulations as states get stricter and Federal stance potentially softens.
Here is
Readying Servicers For Uncertain Market Outcomes
In rate markets, the Fed is holding back on cuts to see if tariffs reignite inflation. And the White House is calling for the Fed to cut now.
This tension is intriguing for many, but the endgame is uncertain. Here are just a few possible market outcomes:
- If rates drop, servicers have a great opportunity to increase refi and purchase loan retention from today's industry average 15% (per Mortgage Bankers Association) to customer retention leaders like Rocket at 83% refi retention.
- If rates drop, it could be because of a softening economy, and servicers must be ready to offer real-time, fully compliant, self-serve hardship assistance for strained homeowners.
- And helping homeowners with all manner of hardship scenarios may become more of a servicer priority as we enter hurricane season, and as pandemic-era policies that largely stopped foreclosures are rescinded.
Because nobody knows exactly how markets will play out, I'll repeat something I told National Mortgage News
The Future Of Servicing Tech Arrives In 2025
In the regulatory and market sections above, I addressed the V and U in VUCA, respectively.
Now I'll address Complexity by talking about mortgage servicing technology.
There are two main reasons it's taken until 2025 to modernize mortgage servicing.
First, it's the most highly regulated area of consumer finance.
Second, it's been historically segmented into three main areas – core, default, and consumer servicing – all of which are broad, deep, and interrelated.
Now we're finally in a place where platforms like
In 2025, servicing tech and AI must provide an API-driven open ecosystem, as well as unified data and UX for borrowers and servicing pros across this entire core, default, and consumer spectrum.
Our job at Sagent is to make this complex vision simple for servicers, and that's what we're delivering incrementally in 2025.
I don't want there to be any ambiguity about that last statement: this is very hard work.
But working with my Sagent team to get this right for the $14.7 trillion mortgage servicing sector is one of the great honors of my career.
And we're moving faster than ever for servicers and their customers.
If you'd like to talk Dara … or VUCA … I'm on standby anytime.
