TMC Benchmark June Data: Volume Subdued & Steady, Lenders Getting More Efficient

It continues to be a tough year for The Mortgage Collaborative's national network of best-in-class mortgage lending institution members as we head into the summer months. Historically, we've seen closed loan volume swell as the weather warms, but continuing challenges to the supply and affordability side of our industry have served as headwinds.
As we look at June's data, we see pretty flat closed loan volume, new applications off 11% month-over-month, but operational efficiency picking up as lenders right-size their staff.
 
Closed loan units decreased by 4% in June when compared to May. Within that, lenders saw closed purchase loans stay flat in June by 1%, but refinances fell by another 20% month over month to their lowest levels in the six-year history of TMC Benchmark. Refinances fell to an all-time low of 14% of all closings in June.
 
Here's the closed loan refinance share we've seen in TMC Benchmark over the first six months of 2022:
January 2022: 39% 
February 2022: 37% 
March 2022: 29% 
April 2022: 24% 
May 2022: 16% 
June 2022: 14%
 
The percentage of conventional closings stayed steady in June at 67% (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) of 23% this month.
 
After falling 3% month-over-month in May, new applications were reduced by another 11% in June. Of note, the product-mix side of new applications was government loans coming in at a TMC Benchmark all-time high of 27% of total new app volume in June. Conventional loans fell to a TMC Benchmark all time low of 65% of new app share.
 
In June, operational efficiency bettered by about 10% across the board. The number of loan units closed per full-time processor increased to 9.01, and loan units per full-time closer swelled from 27.2 in May to 28.2 in June. Closed loan units per full-time underwriter increased to 25.2 from 23.6 in May. The average loan originator closed 4.3 units in June, the exact same number as April and May. Average LO comp came in at an average of 92.2 bps, up 5.5 bps from last month's 86.7 total.
 
Average annual compensation paid to operational staff was very flat month-over-month, with average annual comp paid to FTE processors decreasing slightly to $51,300 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" decreased to 39.7 this month as 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
 
The average cost per closed loan unit our members paid for their loan origination system (LOS) rose slightly yet again from $135 to $142. The average cost per closed loan unit for our members' point-of-sale (POS) system fell from $61 to $59 and increased by $1 to $89 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 rose from $1,403 to an average of $1,498, and government loan lender fees rose from $1,217 to $1,245.
 
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
rswerbinsky@mtgcoop.com