The February data is in for the TMC members that submit to TMC Benchmark. Traditionally the slowest month for the mortgage industry, this February was certainly not traditional. The participants in TMC Benchmark saw month-over-month increases in closed loan units (+1.1%) and closed loan fundings in $ (+4.1%), very similar to the December to January month-over-month increases we saw.
More notably though, TMC Benchmark participants saw new total applications rise 11.8% month-over-month in February after neatly doubling in January when compared to December. And we obviously all know what happened here in March on the new application side. Lenders are now tasked with trying to close massive pipelines of loans into the headwinds of employment disruption and uneasiness around performing interior appraisals and conducting in-person closings. All while most have moved their workforces entirely remote. We're very curious to see how operational efficiency metrics trend these next three months in TMC Benchmark with staffs now remote.
Getting back to February data, the mix of conventional/government closed loan production was weighted slightly more conventional. Refinance activity ticked up on February closings, going from 36% in December to 38% in January to 41% in February, and we all know that refinance % will continue to rise mightily in March, April, and May.
Operational efficiency improved a bit in February, erasing the slight declines we saw in January. Closed loans per FTE processor in February increased from 8.2 to 8.7 (versus the month prior), closed loans per underwriter rose from 27.7 to 28.3, and closed loans per closer increased from 32.3 to 34.8. The average loan originator closed 4.0 loans in February after closing 3.6 loans on average in January. Loans closed a bit quicker in February, with the average "app to clear to close" time frame falling to 31.65 days (a new TMC Benchmark low) from 38.2 days in the month prior. Lenders scrambled in February to quickly close loans to clear the decks for the new waves of apps making their way into the pipeline.
The average LO comp increased substantially to 99.3 bps on February closed loans from 92.3 bps in January. We also saw our lenders raise their non-third party lender fees, from $1,135 in January to $1,213 in February on conventional loans and from $1,095 to $1,132 on govies.
Average salaries paid to processors ($50,317), underwriters ($81,677), and closers ($52,613) fell slightly in February.
Managing remote staff and the cybersecurity considerations that come along with that, challenges with verifying employment, being positioned to adopt e-closings, hedging your pipeline, mitigating repurchase risk, and adapting to GSE guidance regarding appraisal alternatives - these are the topics you've told us are most top of mind to you in this quickly changing climate.
We've lined up another series of lender-led member networking calls on these vital business issues for next week that you'll find below with links to register.
All registered attendees will also be emailed copies of the recordings at the conclusion of each session.
Effectively Managing Remote Employees (for managers)
MARCH 30TH | 4 PM EST
Virtual Leadership - Leading & Communicating from the Home Office
MARCH 31ST | 1:30 PM EST
I'm New to Working From Home - Best Practices on Staying Connected, Productive, and Thriving from the Home Office (for staff)
MARCH 31ST | 3 PM EST
Lender Networking Call: VOE’s & Appraisals – More Time to Digest, Now How Should I Adjust?
MARCH 31ST | 4 PM EST
E-Close Session TBD
APRIL 1ST | 3 PM EST
Capital Markets: State of the Market
APRIL 1ST | 4 PM EST
COVID-19 Effect on Digital Mortgage: How Fannie Mae’s e-Mortgage Team is Supporting Mortgage Lenders in Challenging Times
APRIL 2ND | 3 PM EST
Cybersecurity Considerations for Remote Staff
APRIL 2ND | 4 PM EST
Independent and family-owned, Key Mortgage Services is a local full-service financial products provider leveraging the latest technology to help home buyers save money and close on time, every time.
Since the day they opened their doors in 1988, their mission has remained unchanged — to make home buying easier. They service all of Chicagoland with in-house underwriting capabilities and a team of seasoned professionals trained to make sure they find the right loan for their customers — not for them. Their team of flexible investors allows them to offer a wide variety of niche products that banks and competitors just don’t have.
They invest in their people, they value their partners, and they keep their clients happy. They tell their employees, their referral partners, and their borrowers with confidence that they can always count on Key Mortgage Services.
Since inception, matchbox has been igniting ideas for the mortgage industry with a simple mission: leverage their collective “in-the-trenches” experience in mortgage banking to work with and for their clients to ensure they avoid the hurdles that can cause mortgage bankers and institutions to stumble.
The matchbox team is comprised of passionate mortgage bankers who operate in a client-centric fashion with the continuous goal of exceeding clients’ expectations. Their objective for every project is to have a client make the statement, “We could not have done this without you.”
With over 300 executed engagements, matchbox has a diverse extensive, and unmatched level of mortgage banking experience. matchbox's suite of diverse offerings include: operational workflow and secondary execution reviews. Consulting support in areas including: agency approvals, LO comp reviews, secondary process reports and Encompass secondary offerings.
If you need a trusted resource to navigate your Encompass needs, the team at matchbox's expertise is unparalleled. Their Encompass Consulting solution suite includes: full-technology and systems analysis, LOS implementation, paperless conversion, Encompass 360 custom forms library, Day One Certainty customization and so much more!
The matchbox expertise doesn't stop there. Clients can engage in custom training offerings at part of matchbox university. Offerings include: mortgage process and system training, customized certification programs and their FIT or Focus Interactive Training Program.
Contact Frank Fiore or Jonathan Yosha at matchbox for more information on how matchbox can support your systems with support from experience mortgage bankers that speak mortgage.
Welcome to the network one of our newest Preferred Partners, OptiFunder!
OptiFunder is the market leader in warehouse management solutions for mortgage originators. Particularly relevant in today’s environment, lenders need a robust technology platform to fund sharp increases in loan volumes, adjust capacity, and fund ever-changing funding restrictions that can turn on a dime. OptiFunder’s Warehouse Management System, winner of HousingWire’s 2020 Tech Award provides real time decisions on where to fund every loan to achieve maximum interest spread, reduce errors and automate the warehouse process with single-click funding requests.
Why Partner with OptiFunder?
Anyone wanting to remove hidden expense in their organization should take a look. Far beyond managing warehouse lines, OptiFunder’s decision engine manages complex terms buried in warehouse agreements and selects the optimal placement for each loan in the pipeline to produce the lowest cost of financing across the entire month. Its patent-pending optimization algorithm has proven to decrease mortgage originator’s cost of financing by upwards of 10% while increasing volumes sent to warehouse lenders.
Technology enabled access to warehouse lines critical to funding loans. OptiFunder is fully configurable to manage every warehouse relationship with visibility into the entire pipeline from application through settlement. Its end-to-end viewpoints secure capacity to fund sharp increases in loan volume long before closing and automatically shift pipelines based on changing funding restrictions, bulge increases, and places every loan with the optimal warehouse.
Business Intelligence – CFO’s and Treasury Departments can proactively manage their credit facilities with a robust dashboard providing actionable insights to outstanding balances, daily fundings and settlements, upcoming curtailments and aged loan fees and a comprehensive view into projected expenses across all lines for the month.
Automation – the digital mortgage revolution extends to the back office too. The current funding process requires multiple manual steps of, submitting to warehouse portals, and returning to view loan details. OptiFunder streamlines this process by connecting the LOS to dozens of warehouse providers delivering multiple funding requests with a single click of a button and returns critical information to your LOS automatically.
Built by industry veterans with decades of experience, OptiFunder advises clients on warehouse strategies, operations, and technology roadmaps.
TMC Members are experiencing meaningful expense savings in their first full month on the platform. “We were blown away with the results in the very first month using OptiFunder,” said Chris Prost, Delmar Mortgage’s Chief Financial Officer. “The savings quickly provided positive impact to our P&L and automating our funding process means we can turn more attention to delivering the best experience for our borrowers.”
A unique value to the TMC Membership, OptiFunder offers all members a comprehensive warehouse “back-test” and ROI analysis allowing members to “try before you buy”. This analysis allows CFO’s and Treasurer’s to understand how lenders are realizing up to 300% ROI with a comprehensive funding analysis.
For additional information on OptiFunder, contact COO, Brian Abbott today!
Staff working from home on short notice, challenges with verifying employment, being positioned to adopt e-closings, hedging your pipeline, mitigating repurchase risk, and dealing with appraisal issues - these are the topics you've told us are most top of mind to you in this quickly changing climate.
We've lined up another series of lender-led member networking calls on these vital business issues for next week that you'll find below with links to register. All registered attendees will also be emailed copies of the recordings at the conclusions of the sessions.
How to Handle Verification of Employment in this Climate
MARCH 23RD | 4 PM EST
I’m New to Working From Home – Best Practices on Staying Connected, Productive, and Thriving from the Home Office (for staff)
MARCH 24TH | 3 PM EST
E-Closings - How to Quickly Get My Company Ready to Broadly Adopt
MARCH 24TH | 4 PM EST
Mitigating Repurchase Risk in Uncertain Times
MARCH 25TH | 3 PM EST
Hedging Your Pipeline & Managing Profitability During Dramatic Market Volatility
MARCH 25TH | 4 PM EST
Managing Through Appraisal Issues in the Current Environment
MARCH 26TH | 4 PM EST
Have a topic that you want us to cover through TMC Connect? Fill out the form here!
In order to better support our TMC Family, we will be hosting a series of conference calls to help our members share best-practices regarding how they are managing their operation and pipeline as well how they are dealing with the volatility in the secondary market today.
We've segmented these calls based on your business volume and cap market strategy in an attempt to make it as relevant to you as possible.
Effectively Managing Remote Employees
MARCH 17TH | 2 PM EST
Operational Throughput: Best Practices for Managing a Refi-Bloated Pipeline with Spring Buying Season Looming
MARCH 18TH | 4 PM EST
Capital Markets Best Practices : Hedging Your Pipeline & Extracting Profit During a Refi Boom (For Lenders $1 Billion or Less in Annual Production)
MARCH 18TH | 5 PM EST
Capital Markets – Properly Managing an Inflated Best Efforts Pipeline
MARCH 19TH | 4 PM EST
Capital Markets Best Practices: Hedging Your Pipeline & Extracting Profit During a Refi Boom (For Lenders $1 Billion or More in Annual Production)
MARCH 19TH | 5 PM EST
Have a topic that you want us to cover through TMC Connect? Fill out the form here!
HousingWire recognized the top technology companies for both the real estate and mortgage industries, and - no surprise here! - a multitude of TMC's best-in-class, Preferred Partners were featured on their Tech100 List.
Congratulations to all of these innovative organizations! We're proud to have you as a part of our TMC Family.
Black Knight (represented on both the real estate & mortgage lists)
Pilgrim Mortgage is a full-service, residential mortgage bank founded in 2006 and headquartered in San Antonio, Texas. With superior talent, we offer a truly personalized mortgage lending experience tailored to meet your individual financial goals. Our mission is to match each of our clients with the right loan, customized to fit their needs and lifestyles not just the rates and terms.
As a mortgage bank, Pilgrim Mortgage is a HUD approved lender with the ability to underwrite and close your loan in-house. With these resources and a robust investor base, we can provide both a greater level of service and more loan options, allowing us to differentiate ourselves from a mortgage broker or a retail bank. At Pilgrim, we value consistent communication, timely and reliable service and dedicated support throughout the loan process. We are committed to fostering a lifelong relationship with our clients long after closing day and intend to serve as an ongoing financial resource. Pilgrim Mortgage, LLC “Where performance replaces promise”.
Johnston|Thomas is a full suite boutique law firm, which, among other practices such as real estate and commercial litigation, has a nationally recognized Mortgage Banking Practice Group.
TMC members that leverage the expertise of the team at Johnston|Thomas’s Mortgage Banking Practice Group are eligible for two, 30-minute complimentary consultations annually, which is applicable to both current clients and non-clients of Johnston Thomas. Additionally, TMC members that leverage Johnston Thomas as a partner for their legal needs, receive 10% off the retail cost of services.
Be sure to mark your calendar for Johnston|Thomas & TMC’s first joint web broadcast, on Thursday, March 19th at 1:30 pm ET / 10:30 am PT titled, Invaluable Tips for Maintaining Compliance in 2020 & Beyond.
The discussion will be led by Johnston|Thomas’ Mortgage Banking Practice Group Chair, James W. Brody, Esq. This complimentary webinar will cover many of the most critical compliance topics facing our industry today (e.g., consumer privacy, licensing, loan officer compensation, marketing services agreements, regulatory audits, vendor management, and more). Click here to register today!
Then be on the lookout for upcoming joint podcasts between Johnston|Thomas & TMC, doing bite-sized deeper dives into many of the topics covered on the March 19th web broadcast.
The January data is in for the TMC members that submit to TMC Benchmark. Simply put, things are still busy. Far busier than most expected they would be heading into this winter. And about to get a lot busier.
In January, the participants in TMC Benchmark saw month-over-month increases in closed loan units (+4.6%) and closed loan fundings in $ (+3.9%). More notably though, new applications skyrocketed in January vs. December, increasing by 81%! It's exciting for our team to have daily discussions with lenders having volume capacity issues in the winter, especially after the climate we saw last winter.
Through those conversations we also anecdotally know that February was another incredible month for our members, with 30-year fixed rates dropping into the mid 3's early in the month and down into the low 3's towards the end of the month. This pre-spring buying season surge of business ensures a great start to 2020 for most lenders, setting them up for a very strong 2020 if the rest of the year plays out close to expectations. We're excited to see the changes in the TMC Benchmark numbers when the Feb data is in and reconciled here in late March.
Getting back to January data, the mix of conventional/government closed loan production was in line with the last couple of months. Refinance activity ticked up on January closings, going from 36% in December to 38% in January, a trend we know will continue into February and particularly March with the drop in interest rates.
Operational efficiency fell off a bit in January, continuing the decline we've seen since the even busier summer and fall months of last year. This is most likely do to lenders making no seasonal winter staff reductions like we saw a year ago. Closed loans per FTE processor in January fell from 9.5 to 10.3 (versus the month prior), closed loans per underwriter fell from 36.5 to 27.7, and closed loans per closer saw a huge drop from 49.5 to 33.6. The average loan originator closed 3.6 loans in January after closing 4.7 loans on average in both September and October. Loans closed a bit quicker in November, with the average "app to clear to close" time frame falling to 36.6 days (a new TMC Benchmark low) from 38.2 days in the month prior.
The average LO comp fell to 92.3 bps on January closed loans from 94.4 bps in October. The average non-third party lender fees charged rose from $1,115 in December to $1,135 in January on conventional loans and dropped by $1 from $1,096 to $1,095 on govies. Average salaries paid to processors ($50,739), underwriters ($82,121), and closers ($52,911) fell slightly in January.
This was the 9th straight record month for participation in TMC Benchmark! 51% of participants this month were IMB's and 49% were depositories. 45% of November participants originate $500M or less in annual production, 16% are in the $500M-$1B annual originations range, and 39% of January TMC Benchmark submissions were from companies that originate more than $1B/year. The "over $1 billion" camp rose from 33% to 39%, which could have impacted the overall lower commissions, salaries, and lender fees charged.
TMC - Chief Operating Officer