Mortgage execs advise lenders to embrace technology or risk falling behind

As mortgage lenders confront a “paradigm shift” driven by technology, cost pressures and temperamental market conditions, executives warned that those who fail to adapt risk being left behind.

Speaking at HousingWire‘s 2025 Mortgage Banking Summit earlier this week, David Lykken, the president of Transformational Mortgage Solutions, and Adam Carmel, the CEO of Polly, offered a macro view of the current lending environment and urged lenders to accept the current lack of normalcy in the mortgage space.

“I don’t actually know what ‘normal’ means in this industry,” Carmel said, noting that the mortgage market has moved from a 40-year era of declining interest rates into a new phase of volatility and structural change. “We’re not just seeing cyclical ups and downs. We’re seeing fundamental shifts in how mortgages are fulfilled and consumed.”

Carmel pointed to new-age technologies like artificial intelligence and blockchain as catalysts for long-overdue transformation, remarking that the mortgage industry lags behind other regulated sectors in terms of innovation.

“What’s happened over the last 20 or 25 years isn’t working,” Carmel said. “The cost to originate a loan has gone from $2,500 when I started in the industry to $13,000 today. That’s broken.”

Speaking from a consultant’s perspective, Lykken compared the mortgage industry to Nokia’s fall from dominance when Apple’s iPhone debuted, warning that legacy lenders could face a similar fate if they fail to evolve.

Lykken quoted former Nokia CEO Stephen Elop and said, “We didn’t do anything wrong, but somehow, we lost.”

“People in this industry think they’re doing everything right,” Lykken continued. “But something new could come along. I think we’re really facing some technological structural moves.”

Carmel and Lykken each stressed that lenders can no longer rely on the traditional cycle of staffing up when rates drop and cutting back when they rise. Instead, they argued, technology should allow for a more flexible, scalable workforce.

“I think with the right tooling and the right technology, you should be able to scale up and have a flexible workforce, regardless of the environment,” Carmel said. “You don’t need to hire on a linear basis; it should be more non-linear in terms of what your headcount can do relative to your loan volume.”

“I’ve been in this business for 51 years,” Lykken added. “I’m more excited about the future than I’ve ever been. But the winners will be those who adapt — not those who wait.”