Top Mortgage Lenders Gain Market Share, But Rising Msr Leverage Clouds Outlook

Top U.S. mortgage companies have continued to gain market share in 2025 and are positioned to improve their profitability in the coming years. But growing leverage tied to mortgage servicing rights (MSR) investments is contributing to negative outlooks for some competitors, Fitch Ratings said.

The credit ratings agency released its periodic peer review of nonbank mortgage companies on Friday. The report covered Pennymac Financial Services, Finance of America (FOA), Rocket Companies, United Wholesale Mortgage (UWM) and Freedom Mortgage Holdings. 

Six companies had their ratings affirmed, with the exception of Planet Financial Group, whose rating was downgraded to B from B+. The outlook for Provident Funding Associates improved from stable to positive, while UWM’s outlook shifted to stable from positive. FOA received a positive outlook.

“These affirmations reflect continued franchise strengthening of the largest mortgage companies as the market has consolidated over the last three years,” Fitch said in its report. 

The top 10 originators held 43% of total production from January through September 2025, up from 41% in 2024 and 38.5% in 2023, per Inside Mortgage Finance.

Fitch expects profitability to improve in 2026 on the back of lower mortgage rates and higher origination volumes, following a 37% reduction in industry employment since the 2021 peak. Fannie Mae forecasts $2.3 trillion in originations in 2026, a 21% year-over-year increase.

Rising leverage, refi positioning

Fitch noted that corporate leverage rose across the group due to increased MSR investments. Companies are positioning to capture more refinance loans if rates fall toward 6% — a threshold above which $2.7 trillion in outstanding mortgages sat in the second quarter, according to the Federal Housing Finance Agency (FHFA). 

Non-funding debt to tangible equity averaged 2.1x in Q3 2025 (excluding FOA, which is an outlier), up from 1.7x at the end of 2024. Fitch expects the metrics to stabilize or strengthen in 2026 as volumes rise, but leverage will remain elevated at UWM, weighing on its outlooks.

Mortgage companies have issued more unsecured debt over the course of the year, offering longer maturities that does not encumber their assets and improves financial flexibility. Issuance totaled $11 billion, with unsecured debt making up 30% of total debt in Q3, up from 25% at the end of 2024, according to Fitch.

This provides some breathing room as 85% of outstanding unsecured debt now matures in 2030 or later. Only Rocket has notes maturing in 2026.

Fitch expects some credit deterioration due to weakening employment and affordability pressures, although high levels of home equity should offset risks. Overall asset quality remains solid, with 60+ day delinquencies averaging 2.4% in Q3, unchanged from December 2024.