2,070 Mortgage Lenders. Just 57 Winners* 👀

Rich Weidel has been stirring the pot on LinkedIn lately. And naturally, I'm here for it. 👀

The Princeton Mortgage CEO recently dug into LO migration data from RETR, & the findings say quite a bit about the industry's expensive, never-ending recruiting arms race.

Of 2,070 mortgage companies across all channels, just 57 lenders (2.8%) added more than $400M in net production through LO migration over the trailing 12 months. Those 57 accounted for roughly two-thirds of all positive net production gains.

Meanwhile, about half of lenders lost more production than they recruited. Another 41% managed net gains of less than $100M.

Here's where it gets v interesting: Of 105 lenders that recruited more than $500M in production, 24 still lost ground. Another 44 retained less than a quarter of what they brought in.

That's a 🍫 fudge-ton of recruiting activity for remarkably little net gain. (I'm trying to cuss less.)

Also in today's Mortgage Scoop: Zillow's mortgage gainz 🏋, loanDepot's latest earnings, a couple of lenders that appear to be in trouble & much more!

First, a caveat importante: These numbers measure estimated production gained or lost through LO movement. They're not a ranking of total originations, actual funded volume or organic company growth. A lender could be growing its business quite nicely w/o adding a single LO. (Maybe its existing producers finally figured out non-QM? 🤷)

Still, the RETR data exposes something pretty illuminating about the industry's recruiting obsession. Lenders love 💗 announcing how much production they've recruited. $500M! $1B! Look at all these LOs we've hired! But gross recruiting volume doesn't tell you what walked out the back door. And apparently, quite a bit is walking out the back door.

Princeton Mortgage itself ranked 52nd with $413M in net recruited production, according to Weidel. He says the company accomplished that w/o a dedicated recruiting team. Weidel argues that the biggest gainers generally fall into two camps: lenders w/ enough capital to buy production, & lower-cost operators that can offer better rates & compensation.

There's def some truth to that. And it’s also maybe a touch too early to crown these 57 companies the industry's biggest winners. Like, we have no idea what they paid to recruit that production. Some lenders are paying 140 bps or more, which is bonkers IMO. We also don't know how much of the estimated production actually followed those LOs, or whether those recruits are profitable.

And what about lenders that aren't playing the recruiting game? A company that grows organically, keeps its best producers & runs a tight ship could be in much better shape than one spending millions to poach LOs. Some companies on this list also have sizable servicing & recapture operations, which complicates the picture.

Winning the recruiting war and winning the mortgage business are two very different things. But broadly speaking, this is a v interesting analysis of how some lenders are able to scale in a down market.

Weidel has been making another argument lately that I think deserves more attention: The mortgage industry doesn't necessarily have a revenue problem, but rather a cost problem.

If one lender can manufacture a mortgage for $2,300 less than another, that's a pretty enormous competitive advantage. It can put that money toward better borrower pricing, higher LO comp or, here's a novel concept, profitability.

Of course, actually achieving those efficiencies without sacrificing service, loan quality or the people doing the work is another matter entirely.

Maybe this is where all that mortgage tech investment finally starts paying off. Or maybe lenders just need to get a whole lot more serious about their workflows. (👋 Larry Bailey)?

Either way, I suspect the next crop of mortgage winners won't necessarily be the lenders buying the most production. They'll just be ruthlessly efficient & smart about who’s hanging their shingle at their shop & how they support them.

Here's Weidel's list of 57 lenders. Is your shop on there?

Remember the good ‘ol days when Zillow was basically a lead-gen company referring consumers to mortgage lenders? I still had hair back then. These days, Zillow is increasingly originating those loans itself. Let’s check in on the strategy.

In Q3, Zillow Home Loans originated $1.98B in mortgages, including roughly $1.97B in purchase loans. That's 55% YoY growth in purchase originations, during a quarter when Zillow estimates industrywide purchase volume dropped 4%. (Side note: I’d love to meet the, like, two people who did refis w/ Zillow.) 

Zillow's mortgage revenue rose 32% to $70M, including loan origination, sales & advertising revenue. Through the first nine months of 2026, ZHL funded $5.7B in mortgages, up 79% YoY.

The company has something most lenders would kill for: a massive built-in audience of homebuyers. And it's def getting better at monetizing it.

About two-thirds of Zillow's buyer connections now go to agents participating in its integrated “Preferred” experience. In its most mature markets, roughly 20% of buyers working w/ those agents agree to do the loan w/ Zillow Home Loans.

There are caveats, as you might expect. Rising rates hurt conversion in Q3, & Zillow expects mortgage revenue to decline slightly YoY in Q4. We still don’t know if ZHL is even profitable, since they don’t disclose a standalone profit. I would bet they are not. And in the mortgage biz, they still have a reputation for not being great at nailing the process.

Anyway, here’s a potential crafty Zillow hack: I know of several mortgage LOs who have gotten licensed as agents, sign up for Preferred to get those sweet, sweet Zillow leads, & then close the borrowers w/ their own mortgage shops. I’ll have more on that in a future edition… 

How rough is the mortgage market? Well, some lenders are waving the white flag. On loanDepot's Q3 earnings call, CEO Anthony Hsieh said competitors are closing branches, cutting staff & even "offer themselves up for sale."

He called the consolidation a "healthy process" that should help stabilize first-lien margins as industry capacity shrinks.

Of course, loanDepot has some problems of its own. The lender posted a $29M GAAP loss, compared to $7M in Q2, as origination volume fell 12% to $7.05B. And its stock price is at about 0.55 at the time of this writing. 

Hsieh acknowledged that loanDepot has lost considerable market share in recent years.

"This company was never designed to carry this type of cost structure," he said, referring to its diminished production volumes.

And the market isn't exactly cooperating. Hsieh said rising rates triggered another round of "sticker shock" among prospective homebuyers late in Q3. Some even "canceled their contract."

Still, Hsieh remains bullish on the turnaround. loanDepot believes it's now among the top three nonbank home equity lenders by volume. Its gain-on-sale margins climbed to 399 bps, up from 345 bps.

The goal? Break-even or profitability by mid-’27, even if rates don't improve.

There's also the matter of loanDepot's upcoming debt maturities. CFO David Hayes said the company is exploring refinancing options but offered few specifics. "Our focus is on extending our debt maturity profile," he said.

Last week I reported that there were whispers of tumult at Oregon-based IMB Directors Mortgage. Per sources, there were production resignations Monday morning. Teams left for Citywide Home Loans (Rate) & American Pacific Mortgage. 

A roughly $1B lender based out of Colorado is looking to find a new home for its production team, sources tell me. Mortgage Solutions, founded by Roy Clennan in ‘95, has been losing production volume for some time. A bunch of LOs have decamped for CCM, Mortgage One, PRMG & NAF over the past year, RETR shows. Roy Clennan acquired a small depository called First American State Bank in ‘22.

According to sources, Mortgage Solutions sold its servicing book a few months ago & has laid off key company leaders. Emails & phone calls by leadership have gone unreturned, I’m told. I reached out to company president Rob Clennan, who didn't respond to a request for comment…

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