Production, Salaries, & Turn Times Wane Driving the TMC Network to Focus on Increasing Efficiency and Reducing Costs

​TMC’S LENDER MEMBERS CONTINUED TO FEEL THE IMPACT THAT HIGHER INTEREST RATES HAVE HAD ON THE HOME PURCHASE MARKET AND REFINANCE ACTIVITY, AS VOLUME CONTINUED TO FALL OFF AS WE HEAD INTO THE FALL MONTHS. ON THE FLIP SIDE, TURN TIMES FELL, AND COMPENSATION PAID TO OPERATIONAL EMPLOYEES WAS REDUCED.
CLOSED LOAN UNITS WERE DOWN 26% IN OCTOBER WHEN COMPARED TO THE MONTH PRIOR. WITHIN THAT, LENDERS SAW CLOSED PURCHASE LOANS AND REFINANCES CONTINUE TO REMAIN FLAT MONTH OVER MONTH. REFINANCES REMAINED AT 13% OF ALL CLOSINGS IN OCTOBER FOR A FOURTH MONTH IN A ROW. 
  
HERE'S THE REFINANCE SHARE WE'VE SEEN IN TMC BENCHMARK OVER THE LAST SIX MONTHS: 
  
JANUARY 2022: 39% 
FEBRUARY 2022: 37% 
MARCH 2022: 29% 
APRIL 2022: 24% 
MAY 2022: 16% 
JUNE 2022: 14%
JULY 2022: 13%
AUGUST: 13%
SEPTEMBER: 13%
OCTOBER: 13%
  
THE % OF CONVENTIONAL CLOSINGS ALSO REMAINED FLAT AGAIN IN OCTOBER 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. 
  
NEW APPLICATIONS DROPPED BY 18% IN OCTOBER FROM THE PREVIOUS MONTH. CONVENTIONAL LOANS REMAINED FLAT AT 62% OF NEW APP SHARE.
  
OCTOBER BROUGHT OPERATIONAL EFFICIENCY DOWN FOR EVERYONE EXCEPT CLOSERS. THE NUMBER OF CLOSED LOAN UNITS CLOSED PER FULL-TIME PROCESSOR WERE DOWN TO 6.31, AND CLOSED LOAN UNITS PER FULL-TIME CLOSER INCREASED TO 20.32 IN OCTOBER FROM 16.35 IN SEPTEMBER. CLOSED LOAN UNITS PER FULL-TIME UNDERWRITER DECREASED TO 18.33 FROM 19.56 IN SEPTEMBER. THE AVERAGE LOAN ORIGINATOR CLOSED 2.49 UNITS IN OCTOBER, A DROP FROM 3.22 IN SEPTEMBER. LO COMP CAME IN AT AN AVERAGE OF 88.5 BPS, DOWN JUST UNDER 1 BASIS POINT (BP) FROM LAST MONTH'S 89.3 TOTAL. 
  
AVERAGE ANNUAL COMPENSATION PAID TO OPERATIONAL STAFF DECREASED MONTH-OVER-MONTH, WITH AVERAGE ANNUAL COMP PAID TO FTE PROCESSORS REMAINED FLAT AT $50,542 THIS MONTH. UNDERWRITER ANNUAL COMP ALSO DIPPED TO $85,072. AVERAGE ANNUAL COMP PAID TO CLOSERS TIPPED SLIGHTLY TO $52,990.
  
THE AVERAGE "APP DATE TO CLEAR TO CLOSE DATE" DECREASED TO 37.07 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
  
THE AVERAGE COST PER CLOSED LOAN UNIT OUR MEMBERS PAID FOR THEIR LOAN ORIGINATION SYSTEM (LOS) DECREASED IN OCTOBER TO $134 FROM $143 THE PREVIOUS MONTH. THE AVERAGE COST PER CLOSED LOAN UNIT FOR OUR MEMBERS' POINT-OF-SALE (POS) SYSTEM JUMPED $4 TO $66 IN OCTOBER AND LESS THAN HALF A BPS TO $89 FOR THEIR CRM.  
  
AVERAGE NON-THIRD-PARTY LENDER FEES FOR CONVENTIONAL LOANS REMAINED FLAT ONCE AGAIN $1,172 IN OCTOBER COMPARED TO $1,170 THE PREVIOUS MONTH. GOVERNMENT LENDER FEES ROSE FROM $1,164 TO $1,220 IN THIS MOST RECENT MONTH. 
  
57% OF THIS MONTH'S PARTICIPANTS IN TMC BENCHMARK WERE DEPOSITORIES, AND 43% WERE IMBS. 35% ORIGINATE UNDER $500M A YEAR IN ANNUAL VOLUME, 31% ORIGINATE BETWEEN $500M-$1B, AND 34% ORIGINATE OVER $1 BILLION PER YEAR IN ANNUAL PRODUCTION.