The Mortgage Industry in 2025: The Shift Every Loan Officer, Broker, and Real Estate Agent Needs to Know

The mortgage industry is undergoing a massive transformation in 2025. Loan officers are dropping out, mortgage brokers are on the rise, and even real estate agents are stepping into the mortgage space. If you’re in the industry or considering joining, understanding these shifts is crucial to staying ahead.

I’m Megan Marsh, a 20-year veteran in the mortgage broker space, and I empower loan officers, entrepreneurs, and real estate professionals in launching and growing successful mortgage brokerages. Let’s dive into the major industry changes shaping 2025.

1. The Great License Drop-Off: Loan Officers Are Leaving

Loan officers are not renewing their licenses at the same rate as in previous years. Why? Because many were banking on interest rates dropping, and when they didn’t, those dependent on refinances found themselves struggling. Without a solid purchase business strategy, many had no choice but to leave the industry.

The Data Behind the Drop-Off

• According to the latest data from the Stratmor Group, a significant number of mortgage originators who joined during the 2021 refinance boom are now exiting due to the decline in refinance opportunities and tighter lending conditions.

• Profitability for many loan officers has plummeted, forcing them to seek alternative careers.

• Mortgage News Daily reported that mortgage applications have decreased year over year, leading to a shrinking market for traditional loan officers.

Who’s Thriving?

The loan officers who have survived and are thriving have adapted. They’ve expanded their product knowledge, leaned into the broker model, and offered more options to clients. The key lesson? Adaptability is the name of the game in 2025.

Some of the strategies successful loan officers are using include:

• Focusing on purchase loans instead of relying on refinances.

• Building relationships with real estate agents to get direct referrals.

• Learning about alternative lending products, such as DSCR loans, bank statement loans, and non-QM products.

2. The Mortgage Broker Boom: Why Loan Officers Are Making the Switch

Loan officers are leaving retail lending and shifting to mortgage brokerage at an accelerated pace. The reason? More flexibility, better loan options, and, most importantly, higher earning potential.

The Broker Advantage

• More Loan Products: Brokers are not tied to one lender’s rates or underwriting restrictions, allowing them to offer a wider array of loan options.

• Higher Commissions: Loan officers in the broker channel often receive higher commission splits compared to retail lenders, meaning more take-home pay per deal.

• Greater Control: Mortgage brokers enjoy fewer bureaucratic hurdles and more entrepreneurial freedom.

The Numbers Don’t Lie

BusinessWire released an article at the end of 2024 citing a Polygon Research study that found customers save an average of $1,662 when working with a mortgage broker compared to a direct lender. This cost savings is fueling demand for brokers, which in turn is attracting loan officers to leave retail lending.

Stratmor Group’s study, Thinking About Wholesale? What Loan Officers and Lenders Should Consider, compared the earnings of a retail branch manager versus an independent mortgage brokerage owner. The result? The broker model consistently came out on top in terms of profitability.

How to Transition Successfully

If you’re considering the switch, here’s how to make it a smooth process:

1. Get your NMLS license in multiple states to expand your reach.

2. Partner with a strong wholesale lender network to offer diverse loan products.

3. Leverage technology and automation to process loans efficiently.

4. Develop a marketing strategy using social media and video content to attract borrowers.

Key Takeaway: If you’re a loan officer tired of lender-imposed limitations, 2025 might be the perfect time to transition to the broker model. For branch managers, this could be your opportunity to take full control and maximize your income.

3. Real Estate Agents Are Getting Mortgage Licenses – Should You?

In a trend that’s shaking up the industry, real estate agents are obtaining mortgage licenses at record numbers. Why? Because they see the opportunity to double their income and maintain greater control over their transactions.

Why Real Estate Agents Are Moving Into Mortgage

• Increased Income: By adding mortgage commissions to their existing real estate earnings, agents can significantly boost their bottom line.

• More Control Over Deals: Instead of relying on external loan officers, agents with mortgage licenses can streamline the process and enhance client satisfaction.

Industry-Wide Shifts

The mortgage brokerage service market is expected to grow by 12% in the coming years, driven in part by real estate agents entering the space. Companies like Houwzer are already capitalizing on this shift, restructuring their business models to function as one-stop shops for real estate and mortgage services.

Houwzer stated in a recent Medium article: "The traditional real estate model is outdated. Too often, buyers and sellers endure stressful, fragmented transactions. We’re changing that by integrating mortgage services directly into our real estate operations."

At Co/LAB Brokerages, we’re seeing this firsthand—more agents and brokers are adding NMLS licenses and launching mortgage businesses to diversify their income streams.

How to Get Started as a Dual-Licensed Agent

• Research your state’s requirements for mortgage licensing.

• Partner with an established mortgage brokerage to gain experience.

• Use your real estate database to generate leads for both home sales and loans.

Should You Get Dual-Licensed? If you’re a real estate agent looking to maximize your earnings and provide a seamless experience for clients, the answer is a resounding YES.

4. The Loan Officers Thriving in 2025 Are Those Who Adapt

Here’s the truth: what worked in 2020 or even 2015 won’t work in 2025. If your business relied solely on in-person networking or referrals, you may struggle in today’s market. The mortgage professionals thriving right now are those who are evolving and embracing change.

How to Stay Ahead in 2025

• Strengthen Your Online Presence: If your ideal clients can’t find you on social media or Google, you’re essentially invisible.

• Experiment with New Strategies: If cold calling, social media marketing, or video content scares you, it might be exactly what you need to do.

• Expand Your Product Knowledge: The borrowers you worked with in past years might not be the same ones active in today’s market. Are you targeting investors? Business owners in need of non-QM loans? Commercial deals?

Winning Strategies for 2025

• Utilize video marketing to build trust with clients.

• Create educational content about mortgage products on social media.

• Develop referral relationships with financial advisors and CPAs.

The industry is evolving, and those who refuse to adapt risk getting left behind. Learning new strategies, leveraging technology, and stepping outside of your comfort zone will be key to winning in 2025.

Final Thoughts: How Will You Adapt?

The mortgage industry in 2025 is all about adaptability. Loan officers are leaving, brokers are thriving, and real estate agents are claiming a bigger piece of the pie. The question is: are you ready to evolve and win in this new landscape?

Drop a comment below—are you staying put, making the switch to brokerage, or getting dual-licensed? What’s your move for 2025?

And don’t forget—subscribe to stay updated on the latest mortgage and real estate industry trends. We’ll keep you informed so you can stay ahead of the curve.

Megan Marsh
CEO/ FOUNDER of Co/LAB Broker Concierge

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