MBA IMB Conference Recap: Cautious Optimism and a Focus on Efficiency
Last week I attended the MBA's Independent Mortgage Bankers Conference in Austin, where industry leaders gathered to discuss the state of the market, economic trends and strategic priorities of 2025. The overall sentiment of the event was cautiously optimistic about the industry's trajectory going forward.
Market Sentiment: Progress, But No Breakthroughs
Compared to recent years, the industry is seeing signs of improvement. The biggest takeaway? Mortgage lenders are still in a challenging environment, but things are better than they were in 2023 and the first half of 2024. According to the MBA’s economist Mike Fratantoni, over 70% of IMBs were profitable in Q3 2024, a stark improvement from just 25% two years ago.
However, this optimism remains tempered. The general consensus is that 2025 will not be a banner year, but it will be a step in the right direction. With origination volume forecasted to grow by 15% this year, IMBs are focusing on strategies to remain profitable in a still-volatile market.
Interest Rate Outlook
The industry continues to keep a close eye on interest rates. Forecasts suggest that rates will remain in the 6% to 7% range throughout the year, with periods of short-lived drops. Any dip toward 6% could spur temporary spikes in refinance activity, similar to what was seen in late 2024. However, with rates likely to rise again, lenders are preparing for a market where purchases continue to dominate. The latest MBA forecast expects origination volume to be around the $2 trillion mark.
Profitability: Expense Management and Technology Integration
One of the biggest drivers of improved profitability has been the drastic reduction in expenses. Over the past two years, IMBs have cut full-time employee (FTE) counts by 44% from peak to trough. This right-sizing has allowed lenders to operate more efficiently despite lower origination volumes.
Technology continues to remain a key focus. Tech expenses have doubled over the past decade—now accounting for 11% of overall costs— but its impact varies widely. Larger lenders have successfully leveraged AI and automation to double loan production per employee. However, smaller IMBs with fewer resources may struggle to see the same efficiencies.
Customer Retention: A Key Priority
One statistic that particularly stood out for me was that IMBs currently retain only 17% of borrowers for their next loan. With growing consolidation among community banks and credit unions, IMBs are prioritizing customer retention strategies. This includes leveraging servicing portfolios and AI-driven CRM tools to identify borrowers who may be in the market for their next home loan.
The Role of the New Administration
With the recent change in administration, discussions at the conference centered on policy shifts, particularly around the Federal Housing Finance Agency (FHFA) and the GSEs. There is cautious support for moving Fannie Mae and Freddie Mac out of conservatorship. However, industry leaders stressed the need for a gradual approach that maintains an explicit government guarantee for MBS to avoid unintended rate spikes.
Additionally, IMBs are advocating for a reduction in mortgage insurance (MI) premiums for FHA loans. The current mortgage insurance fund is reportedly significantly larger than necessary, and lowering MI premiums could improve affordability and expand homeownership opportunities.
Looking Ahead
The overarching theme of the conference was clear: The industry has adapted to market challenges, but sustainable growth will require a careful balance of cost management, technology investment and customer retention. While 2025 is expected to be an improvement over the past two years, IMBs must remain agile and strategic to navigate the evolving mortgage landscape.
At CSS, we understand the challenges IMBs face in today’s competitive environment. Our fast and efficient closing solutions and vast network of appraisers help lenders streamline their processes, reduce costs and enhance the borrower experience. With our technology-driven approach and commitment to service, we provide IMBs with the tools they need to stand out in an increasingly crowded field. Whether it’s through appraisal management, title insurance, or innovative closing solutions, CSS is here to support lenders as they navigate the road ahead.
Ashley is the CEO of CSS and oversees all aspects of the company’s strategy and operations.
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