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8/29/2022

TMC Benchmark July Data: Slow Summer Continues, Government Loan Share of Apps & Closings Hit All-Time TMC Benchmark Highs

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Efficiency, applications, and production declined for The Mortgage Collaborative's national network of best-in-class mortgage lending institution members in July. This month government applications and closings were a bright spot amidst a continued wane in overall volume as we head into the heart of summer.

Closed loan production (in units) decreased by 8% month-over-month for the network. While refinances continued to shift downward another 13% in July, lenders saw closed purchase loans decrease by only 2% in July.

Here's the closed loan refinance share we've seen in TMC Benchmark over the first seven months of 2022:

January 2022: 39%
February 2022: 37%
March 2022: 29%
April 2022: 24%
May 2022: 16%
June 2022: 14%
July 2022: 13%

The percentage of conventional closings dropped slightly in July to 66% (units). Historically, conventional loans have represented 75-76% of all closed loan units these past six years. On the flip side, government loan closings came in at an all-time high (by share) for the second month in a row of 27%.

Despite new applications falling an additional 11% for the second month in a row, government loans increased again this month at a TMC Benchmark all-time high of 29% of total new app volume. Trending downward in 2022, conventional loans fell to a TMC Benchmark all time low of 55% of new app share.

In July, operational efficiency decreased by about 6% across the board from June's spike. The number of loan units closed per full-time processor increased to 8.54, and loan units per full-time closer reduced from 28.2 in June to 25.5 in July. Closed loan units per full-time underwriter decreased to 23.1 from 25.2 in June. The average loan originator closed 3.8 units in July, decreasing as well after staying steady April-June. Average LO comp came in at an average of 90.4 bps, down 1.8 bps from last month's 92.2 total.

Average annual compensation paid to operational staff remained very flat month-over-month, with average annual comp paid to FTE processors increasing slightly to $51,500 this month. Underwriter annual comp remained at $88,000. Average annual comp paid to closers also remained at $53,000.

The average "app date to clear to close date" remained flat at 39.2 this month. Lenders dealt with staff attrition and pipelines of pretty much nothing but purchase transactions. Let's look at how this number trended throughout 2021 and into 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

Our members' average cost per closed loan unit for their loan origination system (LOS) increased again from $142 to $150. The average cost per closed loan unit for our members' point-of-sale (POS) system increased from $59 to $65 and increased by $3 to $92 for their CRM.

In the face of much lower volume and margins, our members continue to increase their non-third-party lender fees. Conventional loans dropped from $1,498 to an average of $1,136, and government loan lender fees lowered slightly from $1,245 to $1,102.

52% of this month's participants in TMC Benchmark were depositories, and 48% were IMBs. 38% originate under $500M a year in annual volume, 27% originate between $500M-$1B, and 35% originate over $1 billion per year in annual production.

Rich Swerbinsky
President & COO, The Mortgage Collaborative

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