BrokerVA
BrokerVA Team · October 30, 2026

Where Mortgage Operations Overspend: A Vendor and Contract Review

Where Mortgage Operations Overspend: A Vendor and Contract Review

A yearly review of what you pay vendors, what you use, and what overlaps is a practical way to find cost to cut. Freddie Mac found technology expense per loan rising from 2% to 4% over three years, with leading lenders scrutinizing contracts. Here is the routine, as part of our guide to lowering your cost to originate.

Why Review Vendors at All?

Because the cost has been climbing. Freddie Mac's 2024 Cost to Originate Study names a growing technology stack as one of four reasons costs rose, reporting that technology-related expenses per loan went from 2% to 4% over three years. Lenders it interviewed said vendor costs per seat or application have been increasing, and that in third-party solutions they have roughly doubled in a short time.

The study also describes what leading lenders do: they scrutinize contracts, renegotiate fees, eliminate duplicative work, and shop for alternatives. Negotiating vendor prices appears on its list of the tactics lenders use to control costs. Freddie Mac sells digital tools, so weigh its interest, but the habits it describes are ordinary management.

Spending on AI is adding to the pile. National Mortgage News reports that 56% of large organizations in the AARMR, MBA, and BCG survey, those with at least $5 billion in annual revenue, expect to spend more than $50 million on AI this year, up from 29% in 2025. That figure describes large firms in a small sample, not typical brokerages. It does show how fast tool spending is growing.

What Should You Inventory?

Start with a simple list of every vendor, subscription, and tool. These fields are our recommendation:

  • Vendor and purpose, such as loan origination system, CRM, e-signature, credit reporting, or verifications
  • Owner, the person who uses it and the person who pays for it
  • Annual cost, all in, including add-ons and integrations
  • Pricing basis: per seat, per loan, per application, or flat
  • Term, renewal date, and notice period
  • Minimums and auto-renewal terms
  • Actual usage, such as active seats and loans or applications processed
  • Data access: what borrower data it touches
  • Security documentation, and the date you last reviewed it
  • AI use, if any, and where

Include tools that were bought outside your normal process. In the same survey, more than one-quarter of respondents acknowledged that employees use AI outside approved environments, as National Mortgage Professional reported. Unsanctioned tools can duplicate approved ones and add risk.

What Should You Look For?

Patterns that signal waste. These are our checklist, not findings.

  • Overlap. Two tools doing the same job, such as separate document or communication tools.
  • Unused seats. Licenses for people who have left or never log in.
  • Pricing that scales against you, such as per-loan fees that rise with volume.
  • Minimums that exceed use, and auto-renewals you forgot.
  • Integration and add-on fees that weren't in the original price.
  • Manual workarounds. If staff spend time bridging two systems, the cost is in the labor, not the invoice.
  • Shadow tools that duplicate approved ones.

How Do You Prioritize?

By annual spend and by renewal date. Sort the list by cost, and put every renewal and notice deadline on a calendar. In our experience, the best time to negotiate is well before renewal, not in the final weeks, when you have little leverage. A reminder 90 to 120 days ahead gives you room to compare alternatives and decide.

What Should You Ask When You Renegotiate?

These questions are our suggestions:

  1. Can the price be tiered by volume, or capped?
  2. Can unused seats be removed, and can seat counts flex up and down?
  3. Is a shorter term or termination for convenience possible?
  4. What happens to price at renewal, and is there a cap on increases?
  5. Which features and integrations are included, and which cost extra?
  6. How is our data returned or deleted if we leave?
  7. What are the support and uptime commitments?

Get any commitments in writing, and compare at least one alternative before you decide.

What Shouldn't You Cut?

Be careful with tools that protect compliance and security. Cutting them can move cost around, since the problems they prevent tend to return as rework or findings. And remember that you stay accountable for your vendors. The FTC's Safeguards Rule requires financial institutions to select capable service providers, require safeguards by contract, and assess them periodically.

What About Risk?

Review it at the same time. In Ncontracts' 2026 survey, reported in MBA Newslink, 63% of vendor-risk programs had one or two dedicated staff and more than half of organizations managed 300 or more vendors. Ncontracts sells vendor-risk software, and the survey covers financial services broadly, so treat it as an indicator. The takeaway is that a simple, consistent vendor file is better than none, and the inventory above is a good place to start it. See What the 2026 Vendor-Risk Survey Means for Outsourced Mortgage Operations and Security Due Diligence for Outsourced Mortgage Operations.

What Does an Annual Routine Look Like?

Six steps:

  1. Update the inventory each year, and whenever you add a tool.
  2. Check usage against cost for each item.
  3. Flag overlaps, unused seats, and approaching renewals.
  4. Pick the top few by spend and renewal date.
  5. Renegotiate or replace, with alternatives in hand.
  6. Record the result, and add the change to your cost-reduction plan. See A One-Page Cost-Reduction Plan.

As an illustration only, with made-up details, a brokerage might list 14 tools, find two that overlap and a handful of unused seats, and put the renewal dates on a calendar. The point is the habit, not the numbers.

Read more → Technology & LOS Costs: What the Data Says About a Growing Tech Stack

How Does BrokerVA Fit?

If your review shows staff time going to friction between systems, role-specific support is one option that doesn't require a new platform. Our specialists work in the systems and lender portals you already use, and we may be able to tailor roles to your business. Our 150+ mortgage operations specialists are organized into five stage-based roles, Setup, Disclosure, Closing, Funding, and Post-Closing, and accountability for the loan stays with you and your licensed people.

Our goal is to lower your cost to originate. Every client gets a dedicated Coach for a 6-week implementation, who learns your processes, workflows, SOPs, and expectations, including how your systems are set up, then ongoing coaching and regular check-ins. We can't promise a specific saving, since it depends on your operation. On a call, we'll walk through your numbers and show you our cost calculator live. See how BrokerVA works.

Frequently Asked Questions

How often should I review vendor contracts? At least once a year, and ahead of each renewal. Put renewal and notice dates on a calendar 90 to 120 days out.

What should a vendor inventory include? Vendor and purpose, owner, annual cost, pricing basis, term and renewal date, minimums, actual usage, data access, security documentation, and AI use.

How much have vendor costs risen? Freddie Mac's 2024 study reports technology-related expenses per loan rising from 2% to 4% over three years, and lenders interviewed said third-party solution costs roughly doubled in a short time.

Should I cut security or compliance tools to save money? Be careful. You remain responsible for overseeing your service providers, and the problems those tools prevent tend to come back as rework or findings.

Sources

Want to look at your cost structure together? Book a call with BrokerVA and we'll walk through your numbers and show you our cost calculator.

BrokerVA | NMLS #1977844