TMC BENCHMARK JANUARY DATA: Applications Rise 19% in January Month-Over-Month

TMC lender members saw a welcomed increase in applications to start off 2023. Alternatively, the network saw closed loan production drop fairly significantly compared to last month.

New applications increased by 19% in January from the previous month as rates dipped down during the month, pushing home purchasers off the fence. Conventional loans remained flat at 65% of new app share. It will be interesting to see how the recently announced reduced FHA mortgage insurance premiums impact the mix of new business we see going forward.

Closed loan units decreased by 38% in January when compared to the month prior. Within that, lenders saw closed purchase loans and refinances continue to remain flat month over month. Refinances went back to 13% of all closings in January.

Here's the refinance share we've seen in TMC Benchmark since the beginning of 2022:
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January 2022: 39%
February 2022: 37%
March 2022: 29%
April 2022: 24%
May 2022: 16%
June 2022: 14%
July 2022: 13%
August 2022: 13%
September 2022: 13%
October 2022: 13%
November 2022: 13%
December 2022: 12%
January 2023: 13%


The % of conventional closings also remained flat again in January 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.

Operational efficiency declined for all categories in January. The number of closed loan units closed per full-time processor lowered slightly to 5.37, and closed loan units per full-time closer lowered to 17 in January from 19 in December. Closed loan units per full-time underwriter lowered to 14 in January from 16 in December. The average loan originator closed 1.9 units in January, a drop from 2.2 in December. LO comp came in at an average of 87 bps, down 10.9 basis points (bps) from last month's 97.9 total.

Average annual compensation paid to operational staff increased month-over-month, with average annual comp paid to FTE processors at $51,712 this month. Underwriter annual comp lowered slightly to $85,194. Average annual comp paid to closers rose to $54,632.

The average "app date to clear to close date" increased to 38.33 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
November ’22 – 40.7
December ’22 – 36.97
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January ’23 – 38.33

The average cost per closed loan unit our members paid for their loan origination system (LOS) increased in January to $224 from $173 the previous month. The average cost per closed loan unit for our members' point-of-sale (POS) system climbed $20.91 to $92.46 in January and rose 2 bps to $97 for their CRM. 

Average non-third-party lender fees for conventional loans crept up slightly once again to $1,246 in January compared to $1,225 the previous month. Government
lender fees rose slightly from $1,226 to $1,253 in this most recent month. 

58% of this month's participants in TMC Benchmark were depositories, and 42% were IMBs. 38% originate under $500M a year in annual volume, 25% originate between $500M-$1B, and 37% originate over $1 billion per year in annual production.