TMC Blog

TMC Benchmark August 2021: Summer Slugs On, Volume Stagnates, Refi's Fluctuate

10/8/2021

August looked a lot like the first two months of summer for the lender members of The Mortgage Collaborative. Volume is still solid, but at the low water mark point of the post-pandemic era. Purchase business continues to be a struggle due to inventory issues. And the refinance mix of business continues to sway between 33-40% of all volume, based solely on the movement of interest rates.

Closed loan production (in units) was nearly identical in August from the month prior, up 1.6% across our entire network from July. New applications taken were up 5% from July to August, assuaging fears of a big drop off in volume as we head into the beginning part of winter.

We would have seen an overall volume decrease from July to August had it not been for the highest refinance mix this month that we've seen since April, with refinance's accounting for 39% of all closed loan units this month. Here's the refinance share we've seen in TMC Benchmark the last six months:

March 2021: 55%
April 2021: 44%
May 2021: 38%
June 2021: 35%
July 2021: 33%
August 2021: 39%

Operational efficiency figures stayed nearly identical in August for the TMC network. The number of closed loan units closed per full-time processor rose slightly to 10.9 in August versus the 10.6 June total. Closed loan units per full-time underwriter stayed exactly at 33.6 from 37.1 the month prior. Closed loan units per full-time closer increased to 36.1 from 38.0. The average loan originator closed 6.0 units in August, up from 5.9 in July. LO comp came in at an average of 93.2, down 0.6 bps from last month's 93.8 total. Average LO comp has been in the low 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 ... average annual compensation paid to operational staff bounced around in July. On average, processors in our network were paid an average of $53,600 annually in July while underwriters bumped up to $91,200, with closers at $53,100.

The average "app date to clear to close date" decreased slightly to 42.5 days in August from 43.2 days in July. Let's take a look at how this number has trended throughout the course of the last year:

September 42.8
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

The average cost per closed loan unit our members paid for their loan origination system came in at $126 in July, spiking $9 from the month prior. The average cost per closed loan unit for our members point-of-sale (POS) system was $54 in July and $86 for their CRM, unchanged from the month prior.

51% of this month's participants in TMC Benchmark were depositories and 49% were IMB's. 37% originate under $500M a year in annual volume, 28% originate between $500M-$1B, and 35% originate over $1 billion per year in annual production.

Rich Swerbinsky
President & Chief Operating Officer
The Mortgage Collaborative

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Refi Saturation + Lack of Housing Inventory = Slower July Closing Month for TMC Members

8/30/2021

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Volume finally started to tail off in July for the members of The Mortgage Collaborative that use our valuable network data benchmarking tool. Closed loan units dropped by 20% from June to July as the impacts of a saturated refinance market and an inventory starved purchase market finally started to reveal themselves in the production figures. This was the lowest production month for our members since March of 2020, a month that will always be synonymous with the start of the spread of the COVID-19 pandemic. It's very rare in this industry to see July as the low water mark for closings for the year, but little has been normal in our industry since the pandemic hit.

The 20% drop in closings unsurprisingly mirrored the roughly 20% fall off in applications taken as we moved from the surprisingly busy first quarter. The mix of products stayed the same (74% conventional, 20% govie, 6% other) but business continues to trend more purchase-heavy, with closings increasing from 65% in June to 67% in July. We've seen the purchase share of closed loan units rise five months in a row now:

February 2021: 40%
March 2021: 45%
April 2021: 56%
May 2021: 62%
June 2021: 65%
July 2021: 67%

July new applications taken also fell by 14% from June's totals, but remember, June new app totals jumped up a bit from April & May.

Operational efficiency figures waned in July for the TMC network and we've seen these figures bounce around in the same general range this spring and summer. The number of closed loan units closed per full-time processor dropped to 10.7 in July versus the 11.6 June total. Closed loan units per full-time underwriter fell to 33.6 from 37.1 the month prior. Closed loan units per full-time closer decreased to 35.9 from 41.6. The average loan originator closed 5.8 units in July, down from 6.6 in June. LO comp came in at an average of 93.8, up 1.6 bps from last month's 92.2 total. Average LO comp has been in the low 90's all 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 ... average annual compensation paid to operational staff bounced around in July. On average, processors in our network were paid an average of $53,900 annually in July while underwriters spiked up to $90,500, with closers at $52,600.

The average "app date to clear to close date" bumped up to 43.2 days in July from 41.8 days in June. Let's take a look at how this number has trended throughout the course of the last year:

August 39.5
September 42.8
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

The average cost per closed loan unit our members paid for their loan origination system came in at $126 in July, spiking $9 from the month prior. The average cost per closed loan unit for our members point-of-sale (POS) system was $54 in July and $86 for their CRM, unchanged from the month prior.

56% of this month's participants in TMC Benchmark were depositories and 44% were IMB's. 40% originate under $500M a year in annual volume, 25% originate between $500M-$1B, and 35% originate over $1 billion per year in annual production.

Rich Swerbinsky
President & Chief Operating Officer
The Mortgage Collaborative

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Rich Swerbinsky

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