Mortgage M&a Poised To Accelerate In 2026

In the mortgage M&A arena, 2025 marked a year of transition from distressed sales to strategic moves — a period when large deals took place and servicing became crucial to long-term strategies. 

The broader mortgage sector accelerated its pace of M&A activity in 2025. HousingWire tracked 62 mergers and acquisitions, exits and entrances, investments and joint ventures involving originators, servicers, technology platforms, and title, appraisal and valuation companies. That represents a sharp increase from the 37 transactions recorded in 2024.

In 2025, M&A deals accounted for 71% of total activity, followed by investments and joint ventures at 18%, and exits and entrances at 11%. Still, HousingWire’s reporting likely captures only a portion of actual activity, since many transactions are not publicly disclosed due to the private ownership of most mortgage companies.

Large players closed deals with the potential to reshape the industry. Rocket Companies moved to acquire Redfin and Mr. Cooper, Bayview Asset Management closed its deal for Guild Mortgage, and United Wholesale Mortgage announced its plans to buy Two Harbors Investment Corp.

Servicing becomes crucial

Consolidation in 2025 extended beyond origination into servicing, as companies sought to grow market share by expanding their mortgage servicing rights (MSR) portfolios. While interest rates remain elevated, servicing offers opportunities to cross-sell products, and when rates eventually decline, refinancing activity is expected to rise.

At the same time, debt markets are becoming more favorable for issuers. Larger mortgage companies with access to corporate debt or equity capital are better positioned to grow and further consolidate the industry.

“We are seeing companies that hold large servicing portfolios either grow those portfolios because they already have origination capabilities, or add origination capacity to recapture loans,” said Jennifer Fuller, managing director at Houlihan Lokey. “If they’re able to access capital to grow even further and consolidate, that group could dominate the market even more.” 

This consolidation has a cascade effect, as servicers and subservicers reassess whether combining with other firms makes more sense than operating independently.

“It’s an acquire-or-be-acquired situation as servicing market share concentrates among a smaller number of players,” Fuller said.

Thriving, not just surviving

Over the past three years, higher mortgage rates and lower sales volumes have pressured companies, forcing many to seek partners or shut down. But the market is shifting toward more strategic positioning as firms look ahead to a rebound in origination volumes.

“Distressed deals were more prominent over the past couple of years. Going forward, we’re going to see healthy EBITDA businesses engaging in M&A,” said John Guzzo, managing director of Houlihan Lokey’s financial services group. 

Guzzo added that in the tech-enabled mortgage services arena, private equity exits are expected, with investors selling their positions after four or five years in the space. These businesses include quality control, third-party reviews, underwriting, valuation and appraisal services.

“Because rates have been high for so long, there are 10.1 million mortgage loans that are north of 6%,” Guzzo said. “As interest rates begin to decline — they go to 5.5% — about 20% of all borrowers would be in the money for a refi or home equity (loan). The companies we work with tend to get busier as origination picks up, creating tailwinds for the market.”

More deals in 2026?

Brett Ludden, managing director at consulting firm Milliman — which in December acquired MSR analytics and advisory provider MorVest Capital — expects more transactions in 2026 than in 2025.

“You have the benefit of both buyers and sellers being better positioned,” Ludden said. “When everybody’s making money, it’s more likely that you can have a relatively even bid-ask spread between what buyers are willing to pay and what sellers are looking to be paid.” 

Ludden said that one challenge in recent years was the reluctance of buyers to pay cash upfront — a dynamic that could change as companies become more profitable. Lenders’ net secondary market revenues are improving, meaning they are “making more money with the same volume.”

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This shift may prompt some aging owners to exit the business. Ludden expects both asset and equity transactions, although valuations remain difficult to assess after years of weak performance and the growing role of MSRs. Historically, valuations have been around three times higher than EBITDA.

“On a long-term basis, the biggest lenders will continue to have scale advantages, and they will remain acquisitive,” Ludden said. “They’re going to be trying to pick up as much production as they can.”

Investors in the mortgage space, meanwhile, will face reality. They will be able to assess the true revenue and profitability potential of mortgage companies to decide on how to allocate capital.

“This is a fairly capital-intensive business,” Ludden said. “Investors in those businesses are going to, for the first time in several years, have a chance to see what their individual client or company is capable of doing.

“If they’re not happy with the outcomes, then you’re going to be more likely to see consolidation of the biggest companies to other large companies.”