Top markets for affordable renovated housing inventory

Despite the rapidly deteriorating affordability, there is some hope for homebuyers in the form of renovated homes: properties that have been rehabbed into move-in ready condition after being purchased at auction.

HousingWire Magazine: December 2021/ January 2022

AS WE ENTER A NEW YEAR, let’s look at some of the events that we can look forward to in 2022. But what about what’s next for the housing industry?

Back to the Future of Mortgage Lending

This webinar will be a discussion on understanding what’s to come in the future of mortgage lending by analyzing past trends in the industry, evolving consumer behaviors and demographics of the industry’s production capacity.

Logan Mohtashami on Omicron and pending home sales

In this episode of HousingWire Daily, Logan Mohtashami discusses how the new COVID variant, Omicron, will impact inflation and whether or not it will send mortgage rates lower.

Mortgage

Loan officer wallets flatten as refis dry up

As refi volume dries up, loan officer commissions have too, declining by 17% year-over-year

To the surprise of virtually no one, loan officer commissions started to head south in the third quarter, dropping 17% year-over-year, according to SimpleNexus’ third quarter mortgage loan compensation report.

The reason? Yep, you guessed it: waning refi volume.

From July to September, monthly refi commission dipped by 37%, whereas monthly purchase loan commission rose by a slight 2%, the report found.

Concurrently, per-loan commission rates have started falling, decreasing to 100.372 basis points in Q3 2021 from 102.878 bps in Q3 2020, a 2.44% decline, SimpleNexus said.

The report added that lenders on average have started to “dial down” per-loan commission rates on refis by 7.17%, to 88.384 bps in the third quarter of 2021 from 95.210 basis points in Q3 2020.


Keep Up With the Latest Third Party Origination News

Want to stay up to date with the latest on the third party origination front? We designed a specific news hub with lenders and brokers in mind, with Rocket Pro TPO leading the discussion.

Presented by: Rocket Pro TPO

On the purchase loan side of things, per-loan commissions also took a dive by 1.58% year-over-year, to 108.102 bps in Q3 2021 from 109.838 bps in Q3 2020.

The report also stated that LO funded volume per month stumbled to $2.2 million, a decrease of 14.9% from the third quarter 2020. Refi volume funded by individual LOs declined to $0.9 million in Q3 2021 from $1.3 million in Q3 2020, a 32% drop. At the same time, purchase volume increased 4% to $1.5 million in Q3 2021 from $1.4 million in Q3 2020.

“The heyday of ultra-low rates and enormous refinance volume is over, and compensation is starting to settle back to pre-pandemic levels,” said Lori Brewer, EVP and general manager at SimpleNexus, which recently acquired her former company, LBAWare.

On a happy note, Brewer remarked that “2021 is still shaping up to be the second-highest production year in the last decade, with modest growth in the purchase market helping take the edge off declining refinance volumes.”

Meanwhile, loan officer staffing levels have remained steady year-over-year, falling by a mere 2%. Production-wise, LOs averaged 7.0 loans per month in Q3 2021, versus an average of 9.0 loans a month during the same period last year.

On the other hand, loan processor staffing grew 23% year-over-year, SimpleNexus said. Loan processors averaged 29% fewer loans per month in the third quarter, “fueling a 33% decrease in quarterly bonus compensation earned from $3,201 per processor per month in Q3 2020 to $2,140 in Q3 2021.”

The dissonance between an overcrowded workforce and falling loan volume could spell layoffs in the future.

“We will be watching to see if lenders reduce headcount or take a more conservative approach to incentive comp to protect margin,” Brewer said.

Leave a Reply

Your email address will not be published. Required fields are marked *

Most Popular Articles

Better.com lays off LOs, secures $750M cash injection

Digital mortgage lender Better.com is laying off 9% of its workforce ahead of a $750 million cash injection from financial backer SoftBank Group.

Dec 01, 2021 By

Latest Articles

What Omicron, bond market and jobs mean for housing

We often have two to three job reports per year that miss estimates badly. However, remember that we have over 10 million job openings.

Dec 03, 2021 By
3d rendering of a row of luxury townhouses along a street

Log In

Forgot Password?

Don't have an account? Please