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May was a nearly identical month to April in terms of closed loan volume and new applications for The Mortgage Collaborative's members that submit data to TMC Benchmark. Volume is still very strong by historical standards if off a bit from the sky-high totals of the past twelve months. And the mix of business continues to trend more purchase. Despite supply side challenges for potential home buyers on the purchase side, our members remain very busy as volume levels off from historic highs, a different dynamic than the more historical norm of business escalating into the summer months.
The average TMC member closed 1.9% less units in May vs. April. Closings hit an all time high in September '21 for our members, subsided gradually Oct '21-Feb '22, spiked in March '22, then fell off 20% in April, and stayed pretty flat here in May. Purchase transactions as a share of total closings hit a three-year TMC Benchmark high in May of 62% in the month vs. the 56% total in April.
New application totals taken in May were also nearly identical to the month prior, up 0.7%. For the second straight month, 20% of new apps taken were on government products, up from their more historical levels of 15-18% as lenders continue to grapple with pull backs from Fannie and Freddie on conventional loans, whose new app share came in at 75% in May, inversely down from their 78-80% historical levels.
The efficiency numbers continued to wane in May for our members. The number of closed loan units closed per full-time processor dropped from 14.9 in March to 11.7 in April to 10.2 here in May. Closed loan units per full-time underwriter fell from 47.9 to 38.3 to 34.3 over the same time period. Closed loan units per full-time closer dropped from 56.0 to 43.5 to 39.1. The average loan originator closed 8.6 units in March, 6.8 loans in April and 6.0 loans in May. LO comp came in at an average of 93.2 bps on May closings, up from 91.5 bps in April.
After peaking in the summer, subsiding in the fall, and plummeting last month ... salaries paid to operational staff saw some movement in May. We say processor salaries go up, closers go down, and underwriters stay flat. On average, processors in our network were paid an average of $56,200 annually, while underwriters came in at $83,600, with closers at $52,100. This is first time we've even seen processors be paid higher on average than closers.
The average "app date to clear to close date" ticked down from 45.7 days in April to 43.8 days in May. Let's take a look at how this number has trended throughout the course of the last several months:
The average cost per closed loan unit our members paid for their loan origination system came in at $116 in May, down $3 from the month prior. The average cost per closed loan unit for our members point-of-sale (POS) system was $55 in May and $91 for their CRM.
53% of this month's participants in TMC Benchmark were depositories and 47% were IMB's. 34% originate under $500M a year in annual volume, 28% originate between $500M-$1B, and 38% originate over $1 billion per year in annual production.
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San Diego, CA – June 8, 2021 – The Mortgage Collaborative (TMC), the nation's largest independent mortgage industry cooperative network, has announced the results of its inaugural The Pulse of the Mortgage Industry survey ranking mortgage lenders’ top concerns based on 598 executive responses from the co-op’s 234 lender members. The survey found these six issues to be most critical for mortgage lenders in 2021:
“After a lender hiring frenzy to manage last year’s historic volumes, we fully expected staffing to be one of the top concerns this year, but to have it rank as lenders’ No. 1 concern was truly a surprise,” said Rich Swerbinsky, chief operating officer and president of TMC. “As much as the ‘hire-and-fire cycle’ has come to define how lenders typically manage the peaks and valleys of origination volume, there is also a real concern among lenders about the human impact of this strategy, as well as the operational and financial effects, and lenders seem to be ready to embrace alternative means to better manage volume fluctuations. This aligns neatly with the overall theme we observed in the list of lenders’ top concerns of modernizing the generally inefficient mortgage loan manufacturing process.”
About The Mortgage Collaborative
Based in San Diego, Calif., The Mortgage Collaborative was founded in 2013 by four notable industry leaders and is the nation’s largest independent mortgage cooperative network. TMC is singularly focused on creating an environment of collaboration and innovation for small to mid-size mortgage lenders across the country to reduce cost, increase profitability, and better serve the dynamic and changing consumer base in America. For more information, visit www.mortgagecollaborative.com.
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