December TMC Benchmark Data: Closings Stay Strong, Apps Down 10%, Average Time To Close Hits All Time High As Record Year Comes To A Close
2020 is now officially in the books. While it was a perilous year for many globally, domestically it was an incredible year for the US mortgage lending industry and the 215+ members of The Mortgage Collaborative.
These last few months, we've been talking about a slow and modest drop off for closed loan units and new applications, and that's what we continued to see in December.
Let's start with the data on closed loan units. September 2020 was the pinnacle. Most lenders will look back at that month as their busiest closing month of the year and for many, in the history of their company. Closed loan units fell by 2% in October, another 8% in November, and here in December we were down just 1% from the prior month. So looked at another way, closed loan volume in December was down 11% in total from the September peaks our lender members saw. 76% of December closed loan units were on conventional loans, down 2% from November's 78% total. Government closings represented 20% of December volume, up 2% from November's 18% total.
The refi % share was down 7% from November, but still accounted for 51% of all December closed loans. Here's a look at the TMC Benchmark purchase/refi mix (closed loan units) since the pandemic started:
May - 42% purchase/58% refinance
June - 51% purchase/49% refinance
July - 58% purchase/42% refinance
August - 55% purchase/45% refinance
September - 51% purchase/49% refinance
October - 51% purchase/49% refinance
November - 42% purchase/58% refinance
December - 49% purchase/51% refinance
Applications fell off a little more than closings in December, down 10% from November's new application totals (off the heels of a 7% drop the month prior), portending a 10-15% drop off in closed loan units in the winter months to come. 78% of new December applications were on conventional loans, 17% on government products, and 5% on all other products.
Operational efficiency bettered in December, ending a four-month trend of waning efficiency that we started to see on August closed loans. The number of closed loan units closed per full-time processor in December increased to 13.9 from 13.2 the month prior, with the peak for 2020 being 17.2 on June closings. Closed loan units per full-time underwriter increased to 44.3 from 41.9 the month prior with the 2020 high of 54.8 in this area also coming in June. Closed loan units per full-time closer increased to 52.2 on December closings from 51.0 in November. The high water mark here was also in June, coming in at 64.9 that month. The average loan originator closed 7.8 loans in December, up from 7.5 in November. That average was in the low 8's all summer before peaking at 8.6 in September. LO comp came in at an average of exactly 100.0 bps in December, up from 99.3 bps on November closings.
The average "app date to clear to close date" time frame continued to rise in December, hitting an all-time TMC Benchmark high of 47.4 days. Let's take a look at how this number escalated throughout the year:
After peaking in the summer, and subsiding in the fall, average salaries paid to processors, underwriters, and closers ticked up this month. On average, processors in our network were paid $54,800 annually in November, while underwriters came in at $88,400 and closers at $58,100.
The average cost per closed loan unit our members paid for their loan origination system came in at $117 in December, down from a 2020 high of $124 the month prior. We also saw decreases in the average cost per closed loan for point-of-sale systems to $53 and for CRM's at $108. The average non-third party lender fees charged by our members on December closed loans was $1,119 on conventional loans, $1,035 on government, and $1,282 on all other products.
50% of this month's participants in TMC Benchmark were IMB's and 50% were depositories. 42% originate under $500M a year in annual volume, 23% originate between $500M-$1B, and 35% originate over $1 billion per year in annual production.
President & Chief Operating Officer
The Mortgage Collaborative
TMC - Chief Operating Officer