The November data is in for the TMC members that submit to TMC Benchmark.
Volume is down from the summer and early fall months. But not nearly as down as lenders thought or expected. Q4 2019 and Q1 2020 will be far better for most lenders than they anticipated earlier this year. As volume tails off a bit, operational efficiency is taking a hit. Unlike a year ago, lenders are leaner, less in need of staff cuts heading into the winter, and leery to do so with rates low, applications still strong, and the spring buying season just a few months away.
Closed loan units were down an average of 19.3% per lender (units) in November as compared to October, almost exactly matching the 19% drop in applications we saw in the month prior. The makeup of those November closings unsurprisingly was a little bit more purchase heavy (60%, up from 57%) and a little bit more government product (30%, up from 27%) weighted. Here's the month-over-month change in closed loan units we've seen this fall:
September +1.6% over August
October -5.8% from September
November -19.3% from October
November new loan applications were down 19% (units) from October, just as October saw a 19% drop from the September app totals. Here's the month-over-month change in new applications we've seen this fall:
September +13.6% over August
October -19.1% from September
November -19.0% from October
After seeing huge operational efficiency pickups throughout the spring and summer and a leveling off in September and October, November was the first month of 2019 where we've seen a pretty big drop-off in operational efficiency, which was to be expected given the drop off in volume and lenders not making any staff cute for all the aforementioned reasons. Closed loans per FTE processor in November fell from 12.2 to 9.8, closed loans per underwriter fell from 40.6 to 34.1, and closed loans per closer fell from 53.5 to 43.9. The average loan originator closed 4.3 loans in November after closing 5.4 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 40.1 days from 41.2 days in the month prior.
The average LO comp rose slightly to 95.5 bps on November closed loans from 95.3 bps in October. The average non-third party lender fees charged rose from $1,102 in October to $1,115 in November on conventional loans and dropped from $1,096 to $1,027 on govies. Average salaries paid to processors ($51,949), underwriters ($84,773), and closers ($52,972) also increased by 1-3% in November after a similar increase in October.
This was the 7th straight record month for participation in TMC Benchmark! 55% of participants were IMB's and 45% were depositories. 45% of November participants originate $500M or less in annual production, 25% are in the $500M-$1B annual originations range, and 30% of November TMC Benchmark submissions were from companies that originate more than $1B/year.
Congratulations to Barrett Burns, Phil Bracken, Teri Selin, Jeff Richardson, and the rest of the VantageScore team!
As the marketplace for credit scores becomes increasingly competitive, consumers are drawn towards new approaches that don't sacrifice quality or experience. In order to connect with consumer lenders, VantageScore has been blazing a trail into the mortgage market, keeping in mind the high quality innovation that their customers are looking to utilize in an ever-changing industry. Over the past few years, they have been steadily closing the gap in the volume of consumer credit scoring in comparison the industry giant FICO.
VantageScore totaled 12.3 Billion credit scores across consumer loan credit categories in last 12 months compared to 14.5 billion FICO scores. Lenders don’t appear to be tethered to the legacy process of credit scoring as they once were, as evidenced by VantageScore’s 20% growth YOY since 2015.
2019 will go down in TMC’s books as a year of tremendous growth – adding new employees to our team, continued expansion of our lender member and preferred partner network, and, of course… the year that we launched our Collab Lab Summits!
In NOLA this summer and in Scottsdale just 10 days ago, we’ve brought together over 55 of our lender member companies this year at our bi-annual Collab Lab Summits to share data, information and resources - we’re collaborating on a whole new level.
Earlier this month we were honored to host 6 amazing groups at the Omni Scottsdale Resort & Spa at Montelucia – for our long-time members, you’ll remember that we held our 2017 Winter Conference here. We brought together over 60 folks from our lender member network – four groups of independent mortgage bankers, one group of large banks, and another group comprised of our community bankers.
Once this fabulous event had drawn to a close, we spent some time together to review the group's biggest takeaways from our time in Sunny Scottsdale. And here’s what ended up on our whiteboard…..
Three incredible days in the desert, two generous sponsors in Black Knight and LBA Ware, and one incredible TMC Family made our time together valuable, memorable and so very special.
We can’t wait to see everyone at our next Collab Lab Summit in June of 2020!
Congratulations to the following members of The Mortgage Collaborative for receiving the prestigious Vanguard award from HousingWire!
Michael Jones, Chief Financial Officer, Thrive Mortgage
Tim Elkins, Chief Production Officer, PrimeLending
Aaron Samples, CEO, First Guaranty Mortgage Corporation (FGMC)
And what's this - we have some of our incredible Preferred Partners represented as well?
Mark Hanson, SVP of Securitization, Freddie Mac
Anthony Jabbour, CEO, Black Knight, Inc.
Ben Miller, President & COO, SimpleNexus
David Parker, Chief Product Officer, LoanLogics
Kevin Parra, Co-Founder, Chairman, President & CEO, Plaza Home Mortgage
Michael Schmeiser, CEO, Arch Mortgage Insurance
The HousingWire Vanguard award is one of the top achievements for housing professionals, recognizing the top shapers, influencers, builders and leaders of the housing industry. Check out all 50 executives leading the housing industry here.
TMC - Chief Operating Officer