Closings Still Strong in October, Apps Tailing Off, Efficiency Consistent

As expected, volumes are starting to tail off for the lender members of The Mortgage Collaborative that submit data to TMC Benchmark as we head into the winter months.

Closed loan units were down an average of 5.8% per lender (units) in October as compared to September, but September was the biggest closing month of the year for TMC members. So October was still a very strong closing month for our network. And it is now widely expected that 2019 will be the biggest closed loan year for the mortgage industry since 2007 ($2.3T). Most projections now have 2019 annual originations coming in at slightly above 2016's 2.05T total. The product mix of closings continued to be more conventional heavy, coming in at 70% in October, up 3% from September's 67% total. The purchase/refi mix stayed the same month-over-month, at 58% purchases and 42% refinances. It should be noted that in general, TMC members do a higher % of purchase business than the entire US mortgage market as a whole.

After falling 18% (units) in September versus August, new applications fell again in October, down 19% on average for lenders. For the second straight month, we saw a fairly significant mid-month interest rate increase in October, only to see rates trickle back down towards the end of the month.

Through these continued busy closing times in October, operational efficiency stayed consistent for our network. The average underwriter decisioned 48.8 loans in October, which was identical to the September figure. The average "app to clear to close" cycle time increased slightly on October closed loans, rising to 41.2 days from 40.8 days on closings the prior month. Units closed per processor, underwriter, closer, secondary personnel and per loan originator decreased slightly in October by each position.

The average LO comp rose to 95.3 bps on October closed loans from 91.3 bps in September. The average non-third party lender fees charged stayed pretty flat at $1,102 on conventional loans and $1,096 on govies. Average salaries paid to processors ($51,531), underwriters ($84,521), and closers ($52,832) also increased by 1-3% in October.

This was yet another record month for participants in TMC Benchmark! 52% of participants were IMB's and 48% were depositories. 44% of October participants originate $500M or less in annual production, 27% are in the $500M-$1B annual originations range, and 29% of October TMC Benchmark submissions were from companies that originate more than $1B/year.

Rich Swerbinsky
Chief Operating Officer
The Mortgage Collaborative
​rswerbinsky@mtgcoop.com