Volume, Efficiency Continue To Trickle Slightly Lower As Lenders Brace For What Comes Next

BY RICH SWERBINSKY

 ​Off the heels of what what has been a wild period of time for the mortgage industry stimulated by the pandemic, the last four months have been remarkably consistent from a volume and efficiency standpoint for The Mortgage Collaborative's national network of lender member organizations. Closed loan production and operational efficiency have been down about 1/3 from the peaks we saw one year ago and trickling slightly lower. And the month of September looked a lot like the month prior across all areas we track in TMC Benchmark.

Closed loan production continued to stair-step downward with our members closing 2.4% less units in September versus August. New applications taken saw more of a drop off, down 12.8% during the month, as housing supply challenges and slightly higher interest rates challenged the purchase and refinance markets respectively.

The purchase/refinance mix stayed identical month over month, with purchases once again accounting for 61% of all closings. Here's the purchase share we've seen in TMC Benchmark the last six months:

April 2021: 56%
May 2021: 62%
June 2021: 65%
July 2021: 67%
August 2021: 61%
September 2021: 61%

Operational efficiency figures stayed nearly identical as well in September for the TMC network. The number of closed loan units closed per full-time processor fell slightly to 10.6 in September versus the 10.9 August total. Closed loan units per full-time underwriter dropped by 1 to 32.6 from 33.6 the month prior. Closed loan units per full-time closer increased to 37.0 from 36.1. The average loan originator closed 5.8 units in September, down from 6.0 in August. LO comp came in at an average of 94.5, up 1.3 bps from last month's 93.2 total. Average LO comp has been in the low to mid 90's since spring after averaging in the high 90's all of last year and into the early part of this year.

After peaking in the summer, subsiding in the fall, and plummeting in April, and bouncing around this summer ... average annual compensation paid to operational staff stayed nearly identical from August to September. On average, processors in our network were paid an average of $53,700, underwriters came in at $91,400, with closers at $53,000. 

The average "app date to clear to close date" decreased slightly to 42.3 days in September from 42.5 days in August. Let's take a look at how this number has trended throughout the course of the last year:

October 43.4
November 45.3
December 47.4
January 47.9
February 43.1
March 42.8
April 45.7
May 43.8
June 41.8
July 43.2
August 42.5
September 42.3

The average cost per closed loan unit our members paid for their loan origination system came in at $122 in September, down $4 from the month prior. The average cost per closed loan unit for our members point-of-sale (POS) system was $52 in September and $89 for their CRM.

55% of this month's participants in TMC Benchmark were depositories and 45% were IMB's. 42% originate under $500M a year in annual volume, 26% originate between $500M-$1B, and 32% originate over $1 billion per year in annual production.

Rich Swerbinsky
President & Chief Operating Officer
The Mortgage Collaborative