'When the turn comes, everyone realizes there's going to be a lot of money again'
The rate decline and refinance surge that many experts forecasted for 2025 has not materialized. Economic conditions combined with a hesitant Federal Reserve have kept interest rates closer to 7% for most of the year.
Emmanuel St. Germain (pictured top left), CEO, and Jared Perlman (pictured top right), COO of Choice Mortgage Group, entered the year like many others, expecting a wave of loan activity in 2025 due to falling rates.
“I think last year, everyone was waiting,” St. Germain told Mortgage Professional America. “‘Survive till 25’ was the motto of 2024. I think everyone has been constantly waiting on this, what we’re calling the turn. When that turn comes, everyone realizes there’s going to be a lot of money again, and it will be very profitable.”
Not only did mortgage rates not fall, but they continued to rise as the year progressed. St. Germain noted it wasn’t just rates that stalled, but the whole mortgage industry.
“I think prior to seeing Rocket acquire Mr. Cooper and Redfin, there was a lot of stagnation in the industry,” St. Germain said.
Large companies are ready
With Rocket’s acquisitions, it has positioned itself well to capture borrowers at all stages of the mortgage industry. St. Germain notes that once a customer enters the Rocket system, they will likely stay there.
“You can start to see the writing on the wall,” St. Germain said. “Which is, once you get in a Rocket Mortgage ecosystem, you’re not getting out. I think people are starting to see it and understand it. I think you’re going to see some consolidations of smaller companies to take advantage of economies of scale and efficiencies.
“That’s part of what we’re working on. That’s been part of our strategy, to not sit around and wait.”
Perlman said the biggest difference between the refinance boom in the wake of the COVID-19 pandemic and whenever the next one occurs is that large companies are ready to handle the volume of the next surge.
“The problem with waiting is that when every LO, IMB, broker shop, or small retail place was blowing up in 2021, that was because your major aggregators didn’t have the systems and processes in place to capture it,” Perlman told Mortgage Professional America. “Mr. Cooper has been great, Rocket is better, but... you have the Freedoms, the PennyMacs, the AmeriHomes, of the world who have been paying for loans to come into their ecosystem.
“They are prepared, have AI built out, the overseas staff, the internal loan originators, they’re going to be able to ramp up far quicker than they were the last time. If we’re not doing the same thing, at a different scale, and we’re just sitting and waiting, when the turn comes, we won’t be able to capture the business.”
Worst possible timing
St. Germain and Perlman are veterans of the mortgage industry. They decided to partner and form Choice Mortgage Group in 2022.
“We’ve collectively been working together for a really long time,” St. Germain said. “So, we actually funded our first loan in June of 22, which is the absolute worst month in modern-day history to start a mortgage company. Rates went from like 4% to 7% overnight. We’ve survived, we stuck it out, and now we’re at a point where we’ve already grown 100% this year, with a strong shot of growing another 100% by the end of the year.”
It hasn’t been easy, and with brokers facing elevated interest rates and affordability challenges, St. Germain has seen it wear out other professionals in the industry. He has seen many struggle with being alone and has worked to bring them into the company.
“I can tell you that there’s a lot of fatigue,” St. Germain said. “We’ve been going after the broker-owner because we realize they’re fatigued, and they haven’t been making money. They have to handle everything on their own. They have to wear so many hats. I think that’s why there’s going to be some consolidation, because smaller groups are just tired of having to do everything on their own. We think that’s a great opportunity.”
Perlman said that for small brokers still struggling to navigate challenging market conditions, embracing new technology can be a tremendous help.
In a volatile mortgage market characterized by high rates and affordability issues, Tyler Hodgson (UMortgage Executive Vice President of Growth) stresses the critical importance of mortgage brokers prioritizing their mental health.https://t.co/VPDWtMJCxp
— Mortgage Professional America Magazine (@MPAMagazineUS) July 17, 2025
“They need to invest in technology, not necessarily with money, but time,” Perlman said. “There are a lot of things that we utilize that are very close to free. And we see a tremendous amount of LOs who've been in the market for 20, 30, 35 years who aren't doing any business right now because they're still trying to do it the same way as they did in 2002.
“If you're not adapting, if you're not growing, if you're not using the tools that are out there, just to help streamline your customer experience, you’re just being left behind.”
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