SimpleNexus’ LBA Ware team looked at account data from mortgage lenders who used CompenSafe to automate incentive compensation throughout the third quarters of 2020 and 2021. The controlled sample data set consisted of the retail, top-tier production of LOs and loan processors with at least six funded funds. loans during the three-month period starting July 1, 2021, and ending September 30, 2021.
- Monthly commissions received by LO in the third quarter of 2021 decreased by 17% overall compared to the third quarter of 2020. Monthly refinancing commissions decreased by 37%, accounting for the bulk of the shortfall, while commissions monthly purchase loans remained relatively stable, increasing only 2%.
- Overall, LO saw a 2.44% drop in commission rates per loan, from 102.878 basis points (BPS) in the third quarter of 2020 to 100.372 BPS in the third quarter of 2021. Notably, lenders reduced commission rates per loan on refinances of 7.17%, from 95.210 BPS. in Q3 2020 to 88.384 BPS in Q3 2021. BPS disbursed on purchase loans decreased by 1.58% from 109.838 to 108.102.
- Averaged OL $ 2.2 million in volume financed per month in Q3 2021, i.e. a decrease of 14.9% compared to Q3 2020 ($ 2.6 million). The volume of purchases financed by individual LOs increased by 4% compared to $ 1.4M in the third quarter of 2020 at $ 1.5M Q3 2021, and the refinancing volume decreased by 32% compared to $ 1.3M To $ 0.9M during the same period.
- LO’s workforce remained relatively stable from the third quarter of 2020 to the third quarter of 2021, dropping only 2%. Simultaneously, LO financed loans per month decreased by 22%, with sample LOs averaging 9.0 loans per month in the third quarter of 2020 compared to 7.0 loans per month in the third quarter of 2021.
- The staff of loan processors increased by 23% from the third quarter of 2020 to the third quarter of 2021. Loan processors recorded an average of 29% fewer loans per month in the third quarter of 2021 (15.2 units) compared to the third quarter. quarter 2020 (21.5 units), fueling a 33% drop in the remuneration of quarterly bonuses $ 3,201 per processor per month in Q3 2020 at $ 2,140 in the third quarter of 2021.
“The heyday of ultra-low rates and massive refinancing volume is over, and compensation is starting to return to pre-pandemic levels. On the bright side, 2021 is still shaping up to be the second-highest production year in the past decade. , with modest growth in the purchasing market helping to offset declining refinancing volumes, ”said Executive Vice President and General Manager of SimpleNexus Brewer Lori. “We will be monitoring to see if lenders are downsizing or taking a more conservative approach to incentive compensation to protect margin.”
About SimpleNexus, LLC:
Founded in 2011, SimpleNexus is an award-winning developer of mobile technology first for the modern mortgage lender. Lenders depend on our eponymous homeownership platform to unite people, systems and stages of the mortgage process into a seamless end-to-end solution that covers engagement, origination, close. and business intelligence. By helping lenders manage their teams and stay in touch with borrowers and real estate partners, we deliver a measurable return on investment in the form of reduced turnaround times, increased loan application submissions and more. ‘a greater number of referral cases. Four times an Inc. 5000 company, SimpleNexus has been recognized as one of the world’s best workplaces for innovators. For more information visit https://www.simplenexus.com or follow @SimpleNexus.
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