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.
TMC - Chief Operating Officer