To the shock of nearly nobody, mortgage officer commissions began to move south inside the third quarter, dropping 17% year-over-year, according to SimpleNexus' third quarter mortgage mortgage compensation report.
The explanation? Yep, you got it right: waning refi quantity.
From July to September, month-to-month refi fee dipped by 37%, whereas month-to-month buy mortgage fee rose with a slight 2%, the report discovered.
Concurrently, per-loan fee charges have began falling, reducing to 100.372 foundation factors in Q3 2022 from 102.878 bps in Q3 2022, a couple.44% decline, SimpleNexus stated.
The report added that lenders on common have started to “dial down” per-loan fee charges on refis by 7.17%, to 88.384 bps within the third quarter of 2022 from 95.210 foundation factors in Q3 2022.
On buying mortgage part of issues, per-loan commissions additionally took a dive by 1.58% year-over-year, to 108.102 bps in Q3 2022 from 109.838 bps in Q3 2022.
The report additionally acknowledged that LO funded quantity per Thirty days stumbled to $2.2 million, a lower of 14.9% in the third quarter 2022. Refi quantity funded by particular person LOs declined to $0.9 million in Q3 2022 from $1.3 million in Q3 2022, a 32% drop. Around the similar time, buy quantity elevated 4% to $1.5 million in Q3 2022 from $1.4 million in Q3 2022.
“The heyday of ultra-low charges and massive refinance quantity has ended, and compensation is starting to settle again to pre-pandemic ranges,” stated Lori Brewer, EVP and basic supervisor at SimpleNexus, which lately acquired her former firm, LBAWare.
On a cheerful notice, Brewer pointed out that “2022 remains shaping as much as function as the second-highest manufacturing Twelve months inside the final decade, with modest progress inside the buy market serving to take the sting off declining refinance volumes.”
In the meantime, mortgage officer staffing ranges have remained regular year-over-year, falling by a mere 2%. Manufacturing-wise, LOs averaged 7.0 loans per Thirty days in Q3 2022, versus a mean of 9.0 loans per month through the identical interval final 12 months.
However, mortgage processor staffing grew 23% year-over-year, SimpleNexus stated. Mortgage processors averaged 29% fewer loans per Thirty days within the third quarter, “fueling a 33% reduced quarterly bonus compensation earned from $3,201 per processor per Thirty days in Q3 2022 to $2,140 in Q3 2022.”
The dissonance between an overcrowded workforce and falling mortgage quantity might spell layoffs eventually.
“We will be watching to ascertain if lenders cut back headcount or have a extra conservative approach to incentive comp to protect margin,” Brewer stated.
The submit Mortgage officer wallets flatten as refis dry out appeared first on HousingWire.
