Servicers are aiming for 90% retention of their customers
Recent geopolitical turmoil, including the war in Iran, has trickled down to put a pause on a potential refinance surge in the short term.
The war has caused oil prices to surge above $100 a barrel, which has, in turn, increased inflation concerns. The 10-year Treasury rate, which is closely tied to mortgage rates, has seen a jump in recent weeks.
With mortgage rates moving from the high-5s to the mid-6s, thoughts of a refi boom are likely off the table until at least the second half of the year.
While that may have been a red light for mortgage deals, servicers of current mortgages are seeing nothing but green lights to go after these customers. While a first-mortgage refi is on hold, servicers are coming in with equity products to build that relationship with the thought of a refi down the road.
Brokers could be losing their former customers without even realizing it, and one mortgage executive said the time to act is now, before it’s too late.
Tom Davis (pictured top), chief sales officer at Deephaven Mortgage, said servicers are already working to take broker clients away, starting with equity products.
“They’re already sending emails or calling them,” Davis told Mortgage Professional America. “They're sending them in the servicing statement. Brokers are making a big mistake by not offering equity products. Seven years ago, retention rates from the servicer were maybe 25%. Now they're over 70%, and that applies to all loan officers, whether you're like a mortgage broker or you're a mortgage banker.”
Looking for 90% recapture
Davis said servicers aren’t going to stop at the 70% recapture number that they’re currently pulling in. He said that over the last few years, they have made the process to recapture these customers very smooth.
“The servicers have mastered the retention game,” he said. “If they do the next loan for the borrower, whether it's a second, a purchase, or refi, they have a 90% recapture rate. For brokers, by not offering those products today, not only are they losing the borrower today, but they're losing them in the future.”
In a recent article, Davis read comments made by a CEO of a servicer, who made their feelings known about how aggressively they were going to go after these customers.
“One of the larger servicers, their CEO stated that ‘retention is their religion,’ and so that tells me it's their religious belief to solicit the LO’s clients as soon as they buy that loan,” he said. “That's how strongly they believe in retention.”
Because of the recent bump in mortgage rates, it will be harder for both brokers and servicers to win these clients with refinances. However, the strategy servicers are using is to get a second-lien mortgage now, build a strong relationship with the customers, and then come back and refinance when rates drop.
“The refi game is non-existent, or it's sidelined because of the higher rates,” Davis said. “The cash-out game is actually equity. And what you’re seeing is these products continue to develop. As an originator, having access to all those products allows them to just provide more solutions.”
A large portion of the market
Davis said the equity part of the market could reach $400 to $500 billion in 2026, accounting for one out of every five loans originated. Despite a surge in equity loans in 2025, he said the numbers show there is still a ton of equity to be tapped into.
“You have 24 million millionaires in the United States, which accounts for 40% of the world's millionaires,” he said. “Of those 24 million millionaires, 75% of them are actually millionaires because of their equity in their home. Only 6 million are millionaires because they have north of a million dollars of liquid assets.
“We are an equity-rich country. People need to tap into their equity to renovate their homes because of the age of the housing stock. People need to tap into their equity to consolidate their debt.”
It's not just primary residences that have built all this equity. Davis said equity products also work for your former investor customers, and there is no doubt that servicers would love to get those customers and their future business.
“There are over 19 million investment properties in the United States,” he said. “If they're cash flowing, the savvy investors are not going to refi, cash out of that deal because the property's cash flowing. What you're seeing is investors taking cash out through equity with a second lien. They're using that equity to go buy another property, maybe through a DSCR, or they're leveraging that equity.”
Stay updated with the freshest mortgage news. Get exclusive interviews, breaking news, and industry events in your inbox, and always be the first to know by subscribing to our FREE daily newsletter.
