Are more M&A deals on the horizon? Executives weigh in

Servicing industry continues to see a wave of mergers and acquisitions, presenting a mixed outlook according to industry executives at a recent Mortgage Bankers Association conference. Mortgage consolidation has been on the rise in 2026, with Pennymac acquiring Cenlar’s subservicing business among the notable transactions. The acquisition landscape momentarily slowed due to the large Rocket-Mr. Cooper merger last year, causing a shift in organization values affecting valuation agreements between buyers and sellers. However, industry experts believe that the recent acquisitions of United Wholesale Mortgage and Pennymac were driven by specific organizational matches rather than indicative of an ongoing trend.

David Sheeler, a senior executive vice president at Freedom Mortgage, highlighted the strategic value behind the Rocket-Mr. Cooper deal, emphasizing that the merger combined various components within the mortgage sector. The industry’s selective approach to acquisitions raises questions about whether the trend of shifting servicing domains to nonbanks will persist, considering the various opportunities and challenges associated with such acquisitions.

Despite Sheeler’s expectations of slower acquisition activity in 2026, he acknowledged that the prevailing market conditions could yield unexpected mergers, particularly in areas affected by delinquency, defaults, and forbearance. Experts also predict that potential bank capital rule revisions may increase depositories’ role in mortgage servicing and impact consolidation efforts. The MBA’s data indicates that nonbank servicing has significantly grown over the years, constituting 61% of the market share in 2025 compared to 9% in 2011.

Jason Kwasny, chief servicing officer at ServBank, expressed confidence in the continued consolidation of nonbank mortgage servicers, foreseeing more mergers driven by the desire to control the end-to-end customer experience. He emphasized the importance of enhancing recapture rates by streamlining the origination-to-servicing process, resulting in more comprehensive and efficient operations. The sale of Cenlar’s subservicing business to Pennymac was seen as a strategic move by Cenlar’s COO, Leslie Peeler, who highlighted the compatibility between the companies’ expertise and technology platforms.

Moreover, industry executives are closely monitoring challenges related to insurance costs impacting delinquency rates among homeowners. Industry professionals also discussed evolving regulations affecting insurance availability and affordability, with Michelle Valentine, senior vice president at National General Lender Services, highlighting the implications of a new rule in Nevada regarding insurers’ coverage exclusions. The industry is grappling with various external factors, including artificial intelligence’s impact on jobs and escalating consumer expenditures on energy and property maintenance. Amidst these challenges, the consolidation trend in servicing is likely to continue as market dynamics evolve in response to changing consumer needs and regulatory frameworks.