For all the talk about technology being a game changer, mortgage loans continue to cost more to produce with each passing quarter.
Good afternoon! Was this newsletter forwarded to you?Sign up here.
Hello, LOs!
For all the talk about technology being a game changer, mortgage loans continue to cost more to produce with each passing quarter.
According to the Mortgage Bankers Association's annual report on nonbank profitability, per-loan production expenses checked in at $8,664 per loan in 2021, compared to $7,578 in the prior year. This is the highest level since at least 2008.
Personnel expenses for sales, fulfillment and production support functions rose, climbing to an average of $5,971 per loan, up from $5,272 per loan in 2020, further eating into mortgage profits. Productivity was 2.5 loans per employee per month in 2021, compared to 3.3 loans in the previous year.
Given that overall profitability for nonbanks is dropping fast, this will self-correct to an extent. The industry is likely to shed tens of thousands of jobs in 2022. But what of these fabled savings from technological advances? Do you see any technologies out there that will greatly reduce production costs? At this rate, we'll see production expenses at $10,000 per loan in a few years.
Email me your thoughts anonymously at james@hwmedia.com.
Net gains for nonbanks in 2021 declined to $2,339 on each loan originated, compared to a record $4,202 in the previous year, according to a report published by the MBA on Monday.
IDS' Solitude Solution has Collins Community CU saying "I'm Lovin' It" with eSign and hybrid eClose. One LO loved conducting 8 purchase closings in a single day! Learn more about how one CU helped its members with a single click. Find out in the Qualia Homebuyer Sentiment Index.
.jpg?width=1116&upscale=true&name=MS_A847-HW-Run-of-Site-Banner-Ads-LP-April-June-2022-970-x-250%20(1).jpg)
.jpg?width=1116&upscale=true&name=DEEP-22-NQBoom-970x250%20(5).jpg)
EmoticonEmoticon