The theme for September with TMC Benchmark - another incredibly strong month for closed loans, but new applications and operational efficiency started to tail off as we head into the fall.
July and August were record closing months for many of our members, and historically, have been the two strongest closing months of the calendar year over time. Typically closings start to subside as we move into the fall months but September was actually the strongest closing month of the year for participants of TMC Benchmark with closed loan units up 1.6% over August. We saw several members have record closing months in September. This was no doubt aided greatly by a pretty precipitous drop in interest rates in August, with rates returning to near record lows after we saw them increase in July.
Some other trends of note on September closings - the mix of conventional product was up, with conventional loans accounting for 67% of all closed units, up 6% from August's 61% total. Additionally, mirroring the trend we saw in August with an increased % of refinance applications, 42% of all September closed loan units were refinances, also up 6% from the previous months 36% total. Again, both of these trends are pretty directly corollated to the drop in rates in August.
On the flip side, September applications (measured in units, not dollars) were down 18% from August's new application totals. Rates spiked in mid-September, which slowed down refinance application activity and pushed a lot of prospective home buyers back on the fence. Not surprisingly, in tandem with the drop in application totals, we saw higher %'s of government loan and purchase loan activity. Even with an 18% drop in apps in September, October and November are still likely to be better closing months for most lender than they were projecting this past winter, when things looked bleak. In addition, rates dipped back down to those historically low levels in early October, which will no doubt help October application and November/December closed loan totals.
Through these busy closing times in September, operational efficiency fell off a little bit for our network. The average underwriter decisioned 48.8 loans in September, down from 56.6 in August. It should be noted that this number lived in the low 30's earlier this year. The average "app to clear to close" cycle time increased slightly on September closed loans, rising to 40.8 days from 38.9 days on closings the prior month. Loans closed per processor, underwriter, closer, secondary personnel and per loan originator decreased slightly in September as well.
The average LO comp rose to 91.3 bps in September from 90.6 bps in August. The average non-third party lender fees charged stayed pretty flat at $1,100 on conventional loans and $1,096 on govies. Average salaries paid to processors ($50,934), underwriters ($83,981), and closers ($52,509) also stayed relatively flat month over month.
This was a record month for participants in TMC Benchmark! Amusingly, exactly 50% of participants were IMB's and 50% were depositories. In August that mix was 55% IMB's and 45% depositories. 41% of September participants originate $500M or less in annual production, 27% are in the $500M-$1B annual originations range, and 32% of September TMC Benchmark submissions were from companies that originate more than $1B/year.
Chief Operating Officer, The Mortgage Collaborative
TMC - Chief Operating Officer