TMC Benchmark April Executive Summary: Closings Drop Back Down to Jan/Feb Levels As Refi's Continue to Decline

​There's no way to sugarcoat it; April was a tough month for The Mortgage Collaborative's national network of best-in-class mortgage lending institution members that submit data to TMC Benchmark. Closed loan units were down 15.7% from March as lenders felt the impact of significant increases in mortgage rates that started in January, but that really intensified in early March. The January increases shook a lot of potential refi customers off the fence. The March rate increases no longer made refinance viable for most. Refinances fell to a TMC Benchmark all-time low of 24% of all closings in April.
 
Here's the refinance share we've seen in TMC Benchmark over the last six months:
 
November 2021: 38%
December 2021: 34%
January 2022: 39%
February 2022: 37%
March 2022: 29%
April 2022: 24%
 
We also saw the % of conventional closings come in at a TMC Benchmark all-time low in April, falling to 69% (units). Government loan closings came in at 20%, and the "Other" category (all other products) rose to an all-time high of 11%.
 
After increasing 20% month-over-month in March, new applications fell 23% in April from the prior month. Of note, inside that number was the same trend we saw in closings, with new conventional apps falling (by %) and "Other" increasing. Conventional apps dropped to 67% in April, with "Other" rising from 10% to 12%. Government apps stayed steady by share at 21% from last month.
 
In April, operational efficiency waned in most areas, a byproduct of closed loan production dropping. The number of closed loan units closed per full-time processor fell from 9.2 in March to 8.3 in April, and closed loan units per full-time closer decreased from 31.0 to 28.2. In a strange anomaly, closed loan units per full-time underwriter increased to 24.4 from 19.8 the month prior. The average loan originator closed 4.3 units in April, down from 4.7 in March. LO comp came in at an average of 88.4 bps, down 5.7 bps from last month's 94.1 total.
 
Average annual compensation paid to operational staff was very flat month-over-month, with average annual comp paid to FTE processors coming in at $51,900 this month. Underwriter annual comp ticked up slightly to $86,800. Average annual comp paid to closers rose slightly to $54,000.
 
The average "app date to clear to close date" stayed identical for the third straight month at 39.6 days. Let's take a look at how this number trended throughout the course of 2021 and now 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
 
The average cost per closed loan unit our members paid for their loan origination system (LOS) rose slightly to $131 in April. The average cost per closed loan unit for our members' point-of-sale (POS) system was up $2 to $62 in April and came in flat month-over-month at $89 for their CRM.
 
Average non-third party lender fees continue to trend slightly upward on conventional loans, coming in at $1,148. Government lender fees rose from $1,062 to $1,108 for this most recent month.
 
55% of this month's participants in TMC Benchmark were depositories, and 45% were IMBs. 39% originate under $500M a year in annual volume, 25% originate between $500M-$1B, and 36% originate over $1 billion per year in annual production.
 
Rich Swerbinsky
President & Chief Operating Officer
The Mortgage Collaborative