​TMC’S LENDER MEMBERS CONTINUED TO FEEL THE IMPACT THAT HIGHER INTEREST RATES HAVE HAD ON THE HOME PURCHASE MARKET AND REFINANCE ACTIVITY, AS VOLUME CONTINUED TO FALL OFF AS WE HEAD INTO THE FALL MONTHS. ON THE FLIP SIDE, TURN TIMES FELL, AND COMPENSATION PAID TO OPERATIONAL EMPLOYEES WAS REDUCED.
CLOSED LOAN UNITS WERE DOWN 26% IN OCTOBER WHEN COMPARED TO THE MONTH PRIOR. WITHIN THAT, LENDERS SAW CLOSED PURCHASE LOANS AND REFINANCES CONTINUE TO REMAIN FLAT MONTH OVER MONTH. REFINANCES REMAINED AT 13% OF ALL CLOSINGS IN OCTOBER FOR A FOURTH MONTH IN A ROW. 
  
HERE'S THE REFINANCE SHARE WE'VE SEEN IN TMC BENCHMARK OVER THE LAST SIX MONTHS: 
  
JANUARY 2022: 39% 
FEBRUARY 2022: 37% 
MARCH 2022: 29% 
APRIL 2022: 24% 
MAY 2022: 16% 
JUNE 2022: 14%
JULY 2022: 13%
AUGUST: 13%
SEPTEMBER: 13%
OCTOBER: 13%
  
THE % OF CONVENTIONAL CLOSINGS ALSO REMAINED FLAT AGAIN IN OCTOBER AT 64% (UNITS). HISTORICALLY, CONVENTIONAL LOANS HAVE REPRESENTED 75-76% OF ALL CLOSED LOAN UNITS THESE PAST SIX YEARS. GOVERNMENT LOAN CLOSINGS REMAINED AT ELEVATED LEVELS, COMING IN AT 28% OF ALL CLOSINGS THIS MONTH, FAR ABOVE THE 18-20% RANGES WE’VE HISTORICALLY SEEN IN TMC BENCHMARK. 
  
NEW APPLICATIONS DROPPED BY 18% IN OCTOBER FROM THE PREVIOUS MONTH. CONVENTIONAL LOANS REMAINED FLAT AT 62% OF NEW APP SHARE.
  
OCTOBER BROUGHT OPERATIONAL EFFICIENCY DOWN FOR EVERYONE EXCEPT CLOSERS. THE NUMBER OF CLOSED LOAN UNITS CLOSED PER FULL-TIME PROCESSOR WERE DOWN TO 6.31, AND CLOSED LOAN UNITS PER FULL-TIME CLOSER INCREASED TO 20.32 IN OCTOBER FROM 16.35 IN SEPTEMBER. CLOSED LOAN UNITS PER FULL-TIME UNDERWRITER DECREASED TO 18.33 FROM 19.56 IN SEPTEMBER. THE AVERAGE LOAN ORIGINATOR CLOSED 2.49 UNITS IN OCTOBER, A DROP FROM 3.22 IN SEPTEMBER. LO COMP CAME IN AT AN AVERAGE OF 88.5 BPS, DOWN JUST UNDER 1 BASIS POINT (BP) FROM LAST MONTH'S 89.3 TOTAL. 
  
AVERAGE ANNUAL COMPENSATION PAID TO OPERATIONAL STAFF DECREASED MONTH-OVER-MONTH, WITH AVERAGE ANNUAL COMP PAID TO FTE PROCESSORS REMAINED FLAT AT $50,542 THIS MONTH. UNDERWRITER ANNUAL COMP ALSO DIPPED TO $85,072. AVERAGE ANNUAL COMP PAID TO CLOSERS TIPPED SLIGHTLY TO $52,990.
  
THE AVERAGE "APP DATE TO CLEAR TO CLOSE DATE" DECREASED TO 37.07 THIS MONTH. LET'S LOOK AT HOW THIS NUMBER TRENDED THROUGHOUT THE COURSE OF 2021 AND 2022: 
  
JANUARY '21 - 47.9 
FEBRUARY '21 - 43.1 
MARCH '21 - 42.8 
APRIL '21 - 45.7 
MAY '21 - 43.8 
JUNE '21 - 41.8 
JULY '21 - 43.2 
AUGUST '21 - 42.5 
SEPTEMBER '21 - 42.3 
OCTOBER '21 - 42.6 
NOVEMBER '21 - 41.0 
DECEMBER '21 - 34.0

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JANUARY '22 - 40.1 
FEBRUARY '22 - 39.6 
MARCH '22 - 39.6 
APRIL '22 - 39.6 
MAY ’22 – 42.3 
JUNE '22 – 39.7
JULY '22 – 39.2
AUGUST ’22 – 38.45
SEPTEMBER ’22 – 38.93
OCTOBER ’22 – 37.07
  
THE AVERAGE COST PER CLOSED LOAN UNIT OUR MEMBERS PAID FOR THEIR LOAN ORIGINATION SYSTEM (LOS) DECREASED IN OCTOBER TO $134 FROM $143 THE PREVIOUS MONTH. THE AVERAGE COST PER CLOSED LOAN UNIT FOR OUR MEMBERS' POINT-OF-SALE (POS) SYSTEM JUMPED $4 TO $66 IN OCTOBER AND LESS THAN HALF A BPS TO $89 FOR THEIR CRM.  
  
AVERAGE NON-THIRD-PARTY LENDER FEES FOR CONVENTIONAL LOANS REMAINED FLAT ONCE AGAIN $1,172 IN OCTOBER COMPARED TO $1,170 THE PREVIOUS MONTH. GOVERNMENT LENDER FEES ROSE FROM $1,164 TO $1,220 IN THIS MOST RECENT MONTH. 
  
57% OF THIS MONTH'S PARTICIPANTS IN TMC BENCHMARK WERE DEPOSITORIES, AND 43% WERE IMBS. 35% ORIGINATE UNDER $500M A YEAR IN ANNUAL VOLUME, 31% ORIGINATE BETWEEN $500M-$1B, AND 34% ORIGINATE OVER $1 BILLION PER YEAR IN ANNUAL PRODUCTION.

As expected with the continued climb in mortgage rates, September was a tough month on the closed loan and new applications front, bringing these numbers to their lowest levels in 2022 for The Mortgage Collaborative's national network of lender member companies. A positive takeaway for the month was a continued reduction in the cost per closed loan our members are paying for key tech stack platforms.
Closed loan units were down 12% in September when compared to the month prior. Within that, lenders saw closed purchase loans and refinances continue to remain flat month over month. Refinances remained at 13% of all closings in September for a third month in a row. 

Here's the refinance share we've seen in TMC Benchmark over the last six months:

January 2022: 39%
February 2022: 37%
March 2022: 29%
April 2022: 24%
May 2022: 16%
June 2022: 14%
July 2022: 13%
August: 13%
September: 13%
 
The % of conventional closings also remained flat again in September at 63% (units). Historically, conventional loans have represented 75-76% of all closed loan units these past six years. On the flip side, government loan closings continued to climb into an all-time high (by share) of 31% this month.

New applications were down 16% in September from the previous month. This brings apps back to exactly where they were in July. Conventional loans remained flat at 61% of new app share.

September brought operational efficiency down. The number of closed loan units closed per full-time processor dipped slightly to 7.72, and closed loan units per full-time closer decreased to 16.35 in September from 23.27 in August. Closed loan units per full-time underwriter decreased to 19.56 from 22.74 in August. The average loan originator closed 3.22 units in August, a drop from 3.77 in August. LO comp came in at an average of 89.3 bps, down 4.1 bps from last month's 93.4 total. 

Average annual compensation paid to operational staff decreased month-over-month, with average annual comp paid to FTE processors decreasing slightly to $50,586 this month. Underwriter annual comp also dipped to $86,663. Average annual comp paid to closers increased slightly to $52,673.

The average "app date to clear to close date" increased very little to 38.93 this month. Let's look at how this number trended throughout the course of 2021 and 2022:

January '21 - 47.9
February '21 - 43.1
March '21 - 42.8
April '21 - 45.7
May '21 - 43.8
June '21 - 41.8
July '21 - 43.2
August '21 - 42.5
September '21 - 42.3
October '21 - 42.6
November '21 - 41.0
December '21 - 34.0
January '22 - 40.1
February '22 - 39.6 
March '22 - 39.6
April '22 - 39.6
May ’22 – 42.3
June '22 – 39.7
July '22 – 39.2
August ’22 – 38.45
September ’22 – 38.93

The average cost per closed loan unit our members paid for their loan origination system (LOS) increased in September to $143 in from $137 the previous month. The average cost per closed loan unit for our members' point-of-sale (POS) system stayed flat ($61) in September and dropped by $5 to $88 for their CRM.

Average non-third-party lender fees for conventional loans dipped slightly $1,170 in September from $1,173 the previous month. Government lender fees rose from $1,125 to $1,164 in this most recent month.

53% of this month's participants in TMC Benchmark were depositories, and 47% were IMBs. 36% originate under $500M a year in annual volume, 27% originate between $500M-$1B, and 36% originate over $1 billion per year in annual production.

The HousingWire Vanguard awards represent an elite group of industry executives who are moving the housing market forward. The vast majority of them have carved unique paths for themselves, picking up invaluable knowledge along the way to help them better strategize and lead their organizations. Join us in congratulating the four lender members and eleven preferred partners recognized! Click here to see the full list of Vanguard recipients.

Lender Members
AJ Franchi, President & COO – Gold Star Mortgage Financial Group
Kristi Pickering, President – Academy Mortgage
Michael Dubeck, CEO & President – Planet Home Lending
Tawn Kelley, President – Taylor Morrison Home Funding

Preferred Partners
Aaron King, CEO & Founder – Snapdocs
Benjamin Madick, Co-Founder & CEO – Matic Insurance
Chase Gilbert, CEO – Built Technologies
Dave Savage, Chief Innovation Officer – Sales Boomerang | Mortgage Coach
Jerry Weiss, EVP & Chief Administrative Officer, Freddie Mac
Jim Smith, SVP, Maxwell Diligence – Maxwell
Joe Welu, Founder & CEO – Total Expert
Sandra Madigan, Chief Digital Officer – Black Knight
Shane Westra, Chief Product Officer – SimpleNexus, an nCino company
Shelley Leonard, President – Xactus
Thomas Showalter, CEO – Candor Technology