Reinventing non-bank mortgage lending journey in the age of AI

The mortgage industry’s response to disruption has been predictable—throw people at the problem. During the pandemic-era origination boom, lenders scaled with headcount. When volumes dropped, they cut back. Origination saw some automation gains, but little real transformation. Servicing, meanwhile, remains stuck in a low-margin, manual grind.

Now, as the US mortgage market heads into 2026, a slow but steady recovery is underway—buoyed by easing mortgage rates, marginal affordability gains, and a modest uptick in housing activity. But the affordability crisis is far from solved. Homeownership costs remain well above pre-pandemic levels, locking out large swaths of aspiring buyers. Meanwhile, tariff pressures are also reshaping the landscape, raising construction costs and contributing to volatile interest rates, collateral damage from supply chain reshuffling, making it harder for borrowers to qualify and lenders to close. The market is under pressure, but it’s also recalibrating. M&As continue to redraw the competitive map, as lenders chase scale and operational efficiency. Larger players are absorbing specialized firms to unlock tech synergies and scale. At the same time, agentic AI and advanced automation are no longer fringe; they’re quickly becoming core to how lenders process loans, manage risk, and drive agility. 2025 signals a much-needed reset. The playbook of the past—cutting costs then heads—won’t work anymore. Sustainable growth now demands innovation-led execution.

Against a backdrop of market volatility, affordability pressures, and an industry reset, HFS Research, in partnership with Cognizant, set out to explore how non-bank lenders are evolving in the age of AI, as they carve out a unique and expanding role in the mortgage industry. These lenders are battling to maintain margins, reduce costs, and tap into unconventional funding sources while driving growth, productivity, and differentiation through AI and automation-led innovation.

We surveyed 257 non-bank lenders and ecosystem partners across North America, framing the insights through the lens of Why, What, and How to uncover their evolving strategies and priorities.

• The Why: Growth—non-bank lenders want 2025 to be a growth year despite ongoing uncertainty, turbo-charged by major initiative investments in tech and ops.
• The What: AI and automation—non-banks lenders are investing in AI and automation to drive impact across the mortgage value chain.
• The How: Full-service partners—non-bank lenders are making significant use of outsourcing; partners can play a more strategic role as needs evolve.

The sample intentionally included a mix of IT and business leaders across origination, servicing, and ecosystem partners. To complement the survey, we conducted in-depth interviews with non-bank leaders, road-testing our analysis and augmenting our findings with real-world industry insights.

Key highlights