This article originally appeared in the September 2025 edition of MortgagePoint magazine, online now.
This month, MortgagePoint brings you the latest installment of our quarterly feature entitled Sidebar With Stan, where we ask Freedom Mortgage CEO Stanley C. Middleman five topical questions on a subject of interest.
Stanley C. Middleman serves as President and CEO of Freedom Mortgage Corporation, one of the largest and fastest-growing independent mortgage companies in the United States. He is a nationally recognized business strategist, investor, and philanthropist with over 30 years of experience in the mortgage banking industry. Since founding Freedom Mortgage in 1990, Middleman has grown the company into one of the nation’s largest non-bank mortgage lenders/servicers and a top VA and FHA (government-insured) lender. Middleman is an active member of the MBA, serving on the MBA Board of Directors and previously on the MBA Residential Board of Governors. He has also served on numerous advisory boards in the mortgage industry, including the boards of Freddie Mac, Fannie Mae, and Ellie Mae. He is currently a member of the Housing Policy Executive Council.
This quarter, we’re asking Mr. Middleman questions about his company’s mortgage servicing operations.
Q: Over the past decade, how has Freedom Mortgage adapted its servicing operations in response to evolving regulatory demands and market shifts?
Middleman: The servicing group and the asset of mortgage servicing rights have continued to grow in a very programmatic fashion as we’ve decided, tracing the market steps in an upward interest rate movement since the end of COVID. With that in mind, we decided to more than double down on the growth of our servicing operation. That’s provided us with tremendous stability and strength in terms of cash flows.
The investment and return on that has been phenomenal, and we’ve kept up with it in an ever-improving fashion. It’s not that we need fewer people; it’s that we’re able to manage more loans with the same number of people and improve the quality of our service. I think we’ve done an outstanding job in that fashion of progressing through time and improving our technology, being able to be more successful and handle more volume with the same number of people.
Q: What are the unique servicing challenges associated with the government-issued loans, and how does Freedom Mortgage work to ensure compliance?
Middleman: We spend a lot of time on the compliance side of servicing. It’s an ever-evolving environment. As we went through COVID, we had a whole variety of rules that were put in place to help the consumer survive that unique situation. Now that we’re past that, we’re reverting back to the historical mean.
That means we have to overcome the issues that were created previously while facing the new realities that we’re going to deal with moving forward.
The bigger challenge as we move forward is the shock of having to make mortgage payments by some of our borrowers whose loans were in forbearance. We’ve gone through this extended period where they didn’t have to make payments, and [they’re feeling] that payment shock to their monthly budgets.
That’s happening simultaneously with the student loans that are coming due. All that poses a certain level of risk that we’re going to have to manage as we go forward.
Q: How has technology, such as automation platforms or analytics, transformed your servicing department’s efficiency and borrower experience?
Middleman: The bottom line is that technology is a tool. That tool helps you manage your expenses, and your expenses can’t go below zero. We’ve used those tools effectively to leverage efficiency in the amount of loans that we can handle per person and our cost per loan, and to get that cost per loan down.
We think that the customer experience not only stayed the same as our costs decreased, but it actually improved. By using the current technologies, we’ve become more efficient, our cost
per loan has gone down, and our customer experience has improved. We’re seeing the benefits of all those things show up, all at the same time.
Q: Mortgage servicing requires striking a balance between risk, mitigation, profitability, and borrower support. How does Freedom Mortgage manage these priorities, especially in times of financial stress?
Middleman: Fortunately, we have a certain level of scale and sophistication in the capital markets that provide us with the liquidity to manage the issues that come along with a stressed financial environment. If we needed to have access to liquidity, we have that access. And we do raise capital through the capital markets and in the public markets. It’s not a very stressful situation for us. But if we were smaller and at a different point in time, it could have been a very stressful environment during a period of financial stress in the marketplace. Fortunately, we’ve done a lot of things to stay in the middle of the fairway and deal with consistent products and high-credit-quality customers. I’m not expecting that to be a major issue as we go forward, at least not here at Freedom Mortgage.
Q: Looking back at past disruptions such as economic downturns, interest rate spikes, or even a pandemic, what lessons has Freedom Mortgage learned about maintaining servicing reliability?
Middleman: The key to surviving economic downturns is the opportunities that come out of them. Generally, economic downturns are accompanied by a drop in interest rates, and that creates a tremendous opportunity for new originations, and it creates a tremendous amount of profitability. Servicing becomes an augmentation to that rather than the central figure in the show. In a higher-interest-rate environment, servicing is the featured act. But when we get into a lower interest rate environment, origination becomes the featured act. That’s the difference in being a well-balanced organization that is extremely efficient at both origination and servicing, as profitability and revenue production are of critical importance in running a mortgage business. I think we do a good job on both sides.
Q: In your view, what does exceptional mortgage servicing look like from the homeowner’s perspective, and how does Freedom Mortgage work to deliver that?
Middleman: If the servicer didn’t collect, that would be the most exceptional situation for the homeowner. Unfortunately, we’re pretty good at collecting what’s due. I think the homeowner’s view of the quality of servicing goes to the technology of the system and having the functional support that they need.
Most people make their payments—well over 90%. Having the ease of making those payments and solving issues when they arise is the key to servicing. Any other issues really come from a small minority of consumers. The consumer experience is driven by the majority of consumers who need support to make their monthly payments on a regular basis.
Q: Looking ahead, what innovations or industry shifts do you foresee shaping the next decade of mortgage servicing?
Middleman: Data flow is improving. With the advent of AI, we’ve seen the movement of data, and access to information speed up, as well as the quality of sharing that information, getting the right answers across a wide variety of databases. The resolution of issues and questions is going to speed up. That’s probably the biggest change: our ability to identify and help the consumer and manage their expectations. Having a loan that’s right for them, and opportunities that are right for them, will also speed up and improve the process. The biggest thing is going to be managing the access and the use of the data, which will be more readily available to us than at any point previously in the history of mankind.
Q: What other insights or information would you like to share with those in the industry?
Middleman: Be careful what you wish for. I know a lot of people in the industry think that it would be great to have lower interest rates, and lower interest rates are generally better for origination. But lower interest rates means that there has been some financial turmoil. There have been some economic events that have driven interest rates lower, whether it’s higher unemployment, deflation, or some combination of the two. I think we should be wary of asset corrections, and that may very well come on the heels of a drop in interest rates. You know, it might be fun having a couple of drinks, but the headache the next day may not have been worth the fun of the night before. I think we might be facing a situation where that would be the case. So, be careful what you wish for.
The post Sidebar With Stanley C. Middleman, CEO, Freedom Mortgage first appeared on The MortgagePoint.
