Time Magazine’s Person of the Year for ‘25 is the “Architects of AI.” The jury’s still out on whether that’s a good thing, but I won’t disagree w/ the editors that AI has "roared into view" w/ no "turning back or opting out."

It’s not so easy to choose a single person in the mortgage industry. Greg Sher selected Guild Mortgage CEO Terry Schmidt as his choice. It’s a defensible pick. Schmidt has had an incredible career & led the company's $1.4B sale to mega-servicer Bayview Asset Management. 

Me? I’m going to go w/ the more conventional choice: Rocket’s Varun Krishna. For the first time in company history, Dan Gilbert & the Rocket board in July ‘23 selected an outsider to lead the firm. Krishna isn’t a mortgage banker. He is a technologist, a product guy, more of a big thinker than someone who spends his days strategizing about how to juice a couple more cash-out refis from the lead funnel. (He’s also Canadian 🍁.)

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It’s Krishna’s empire-building vision that the best-known mortgage company in America will be built around. With a pack of seasoned OG Rocket banking execs flanking him, Krishna in ‘24 installed Jonathan Mildenhall to change the brand ethos. There would be no more comedic Super Bowl commercials w/ limited emotional resonance. Instead, Rocket would be closely associated w/ how fucking amazing & hard it is to become a homeowner in America. That consumer perception is so critical to the broader strategy.

In ‘25, w/ the blessing of Gilbert & the board, Krishna announced his first big gamble. It was a $1.8B bet that Redfin’s app, portal & salaried agent workforce could solve Rocket’s longstanding top-of-funnel challenges & reputation as a refi shop w/ a $1B marketing budget. Skeptics say it’s merely a combination of two companies that have not individually hit expectations in the purchase game & it adds a lot of potential compliance headaches along the way. But the size of the opportunity is immense & Rocket is historically quite good at workflow & lead distribution.

The even bigger bet was acquiring Mr. Cooper for $9.4B $14.2B & installing Jay Bray as head of Rocket Mortgage. This one just makes mortgage sense. Mr. Cooper has an astounding servicing book & Rocket is the best in the game at recapture. By all accounts, the integration has gone very smoothly thus far. Even forgetting the hedge of consistent servicing revenue, if Rocket can level up Mr. Cooper’s recapture rate & execute on an ever-replenishing book from Redfin & purchase-focused brokers, they’ll be putting up Covid-era income numbers. We’re talking potentially $12B+ a year in revenue and $6B a year in income.

Also important is the little things Krishna has picked up since joining Rocket from Intuit. Krishna comments on the LinkedIn posts of industry pros/DMs them, goes to industry conferences, engages w/ media & has taken an active role in reshaping the delicate approach to the broker channel.

There is undoubtedly a cultural shift at Rocket under Krishna. Rocket is less transactional & a lot more strategic than they had been in the past.

In 5 years, I might look very silly w/ this take. Perhaps you’ll laugh at how Rocket spent $16B on a real estate portal that couldn’t make money in a booming economy & a servicer that they grossly overpaid for. There is absolutely a risk that the $1T servicing book isn’t worth $14.2B or that the reputational hit for being the largest servicer in America hurts its consumer strategy on originations.

But in my view, no one took bigger swings in ‘25 than Krishna & I’m voting for upside here. Who’s your Mortgage Person of the Year in ‘25? Let me know by replying to this email.

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Forecasters underestimated mortgage rates big-time in ‘22-24, but mostly got it right in ‘25. Among the 17 mortgage rates forecasts collected by Lance Lambert at ResiClub heading into ‘25, the average prediction was 6.33% in Q4 ‘25. Rates on the 30-year fixed are currently at 6.15%, per Optimal Blue’s OBBMI. As for ‘26, 21 forecasters project an average of 6.18% for calendar-year ‘26. The range is 6.60% to 5.75%.

Not to toot my own horn, but I’ve been dead-accurate w/ my own mortgage rates forecast since ‘20. (I have predicted a range of 2% to 9% every year 😜.)

What’s your forecast for next year?

It’s hard to blame Gen Z for embracing risky crypto trading or spending $400 on Lola blankets over stashing money away for a down payment, Bloomberg’s Connor Sen writes in his latest column. 

In a recent study, economists found that dimming prospects for homeownership push households to consume more & make riskier investments (the authors also found evidence of lower effort at work). Unfortunately, such choices produce “substantially greater wealth dispersion between those who retain hope of homeownership & those who give up.”

This 100% makes sense & I believe is as much a matter of youthful economic nihilism as it is a messaging/visibility issue in the mortgage industry. 

LOs: unless you plan on retiring in the next 5 years, you should consider getting on TikTok & YouTube. Think about the long-term pipeline — that’s where the youth are & there’s a big gap in quality content on those platforms. Even the biggest accounts don’t originate, are influencer-y, & routinely spread misinformation. Jen Beeston at Rate has done a brilliant job at building a legit following & it results in tons of business. There’s also a Delaware-based CCM LO named Theoni Rapo who aces the social media game. They both focus on lending & real estate pain points & building credibility over the long haul. It can work.

There’s also good news for you LOs out there thinking about the next generation of homeowners: Sen points out that Gen Z will soon benefit from longer-term demographic shifts. Freddie Mac estimates that the number of boomer-homeowning households declined by 400K in ‘25. By ‘30, that decline will exceed 800K a year. By then, members of Gen Z, along w/ younger millennials, will be in their prime first-time-homebuying years. 

You might recall that millennials in the early '10s too were struggling economically & disillusioned w/ homeownership. And guess what? The homeownership rate for 40-to-44-year-olds in '24 was 65.8%. Maybe it’s time to start getting in front of the Gen Zers now?

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