Tag Archives: Mortgage Loan Compensation Report

SimpleNexus’ Mortgage Loan Compensation Report for Q3 2021 shows year-over-year decline in individual LO commission led by waning refi volume

LEHI, Utah /ScoopCloud/ -- SimpleNexus, owner of the recently acquired LBA Ware™, a leading provider of incentive compensation management (ICM) and business intelligence (BI) software solutions for the mortgage industry, today released summary statistics on the state of mortgage industry loan compensation in the third quarter of 2021. Analysis of data from the CompenSafe™ ICM platform showed that declining loan volume in Q3 2021 compared to Q3 2020 pushed quarterly loan originator (LO) commission earnings down 17%. Over the same period, mortgage lenders increased loan processor staffing by roughly a quarter while funding fewer loans, driving average individual processor incentive compensation down by a third.

Methodology

SimpleNexus' LBA Ware team reviewed account data for mortgage lenders who used CompenSafe to automate incentive compensation throughout the third quarters of both 2020 and 2021. The controlled sample dataset consisted of retail, first-lien production from LOs and loan processors with at least six funded loans during the three-month period beginning July 1, 2021, and ending September 30, 2021.

Key Findings
* Monthly commissions earned per LO in Q3 2021 decreased 17% overall from Q3 2020. Monthly refinance commissions decreased 37%, accounting for most of the shortfall, while monthly purchase loan commissions held relatively steady, rising just 2%.

* Overall, LOs saw a 2.44% decrease in per-loan commission rates from 102.878 basis points (BPS) in Q3 2020 to 100.372 BPS in Q3 2021. Notably, lenders dialed down per-loan commission rates on refinances by 7.17%, from 95.210 BPS in Q3 2020 to 88.384 BPS in Q3 2021. BPS paid out on purchase loans decreased 1.58% from 109.838 to 108.102.

* LOs averaged $2.2M in funded volume per month in Q3 2021, a decrease of 14.9% from Q3 2020 ($2.6M). Purchase volume funded by individual LOs increased 4% from $1.4M in Q3 2020 to $1.5M Q3 2021, and refinance volume declined 32% from $1.3M to $0.9M during the same period.

* LO staffing levels held relatively steady from Q3 2020 to Q3 2021, dipping just 2%. Simultaneously, loans funded per LO per month decreased 22%, with LOs in the sample set averaging 9.0 loans a month in Q3 2020 versus 7.0 loans a month in Q3 2021.

* Loan processor staffing grew 23% from Q3 2020 to Q3 2021. Loan processors averaged 29% fewer loans per month in Q3 2021 (15.2 units) compared to Q3 2020 (21.5 units), 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 heyday of ultra-low rates and enormous refinance volume is over, and compensation is starting to settle back to pre-pandemic levels. On the bright side, 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," said SimpleNexus EVP and General Manager Lori Brewer. "We will be watching to see if lenders reduce headcount or take a more conservative approach to incentive comp to protect margin."

About SimpleNexus, LLC:

Founded in 2011, SimpleNexus is an award-winning developer of mobile-first technology for the modern mortgage lender. Lenders depend on our namesake homeownership platform to unite the people, systems and stages of the mortgage process into a seamless, end-to-end solution that spans engagement, origination, closing and business intelligence. By helping lenders manage their teams and stay connected with borrowers and real estate partners, we deliver a measurable return on investment in the form of reduced turn times, increased loan application submissions and more referral business. A four-time 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.

SimpleNexus, owner of the recently acquired LBA Ware™, a leading provider of incentive compensation management (ICM) and business intelligence (BI) software solutions for the mortgage industry, today released summary statistics on the state of mortgage industry loan compensation in the third quarter of 2021.

Related link: https://simplenexus.com/

LBA Ware’s Q2 2021 Mortgage Loan Compensation Report shows decline in individual LO commission and volume

MACON, Ga. /ScoopCloud/ -- LBA Ware™, a leading provider of incentive compensation management (ICM) and business intelligence (BI) software solutions for the mortgage industry, today released summary statistics on the state of mortgage industry loan compensation in the second quarter of 2021. The firm's analysis of data from its CompenSafe™ ICM platform showed that despite a marginal increase in loan volume from Q2 2020 to Q2 2021, quarterly commissions per LO were down. Over the same period, loan processor workload and bonus compensation each decreased by about a quarter.

Methodology

LBA Ware reviewed account data for mortgage lenders who used CompenSafe to automate incentive compensation throughout the second quarters of both 2020 and 2021. The controlled sample dataset consisted of retail, first-lien production from LOs and loan processors with at least six funded loans during the three-month period beginning March 31, 2021, and ending June 30, 2021.

Key Findings

* Commissions earned per loan originator (LO) in Q2 2021 decreased 6% from Q2 2020. During the same period, loan volume per LO dropped 4% on average.
* LOs averaged $0.9M in funded refinance volume per month, a decrease of more than 36% over Q2 2020 ($1.4M), and received an average of 91.679 basis points (BPS) per refinance loan, a significant decrease of 6.94% from the average of 98.517 BPS in Q2 2020.
* Purchase volume grew 49% year-over-year, with individual LOs averaging $1.52M in funded purchase loans per month (a 41% increase over the $1.08M funded per LO in Q2 2020) and receiving on average 107.649 BPS per purchase loan (versus 108.836 in Q2 2020).
* Overall, LOs saw a 1.76% decrease in per-loan commissions from 103.119 BPS in Q2 2020 to 101.308 BPS in Q2 2021. LOs in the sample dataset took home an average of $2,876 in commissions per loan, or roughly 35% of the $8,243 it costs to originate a retail loan according to 2020 data from the Mortgage Bankers Association*.
* Loan processor staffing grew significantly (49%) from Q2 2020 to Q2 2021. Loan processors handled 27% fewer loans per month in Q2 2021 (15.7 units) compared to Q2 2020 (21.7 units), fueling a corresponding 26% decrease in quarterly bonus compensation earned from $2,684 per processor per month in Q2 2020 to $1,999 in Q2 2021.

"LOs continue to benefit from a strong purchase market buoyed by low rates, flex work opportunities and millennials moving out of their parents' homes. If the macroeconomic environment stays strong for the second half of 2021, LOs could have another banner year," said LBA Ware Founder and CEO Lori Brewer. "Another notable observation is that lenders added processing manpower at almost ten times the rate they added LOs in Q2. It remains to be seen if that level of operational staffing will be sustainable over the long term."

*Source: Mortgage Bankers Association's Chart of the Week for July 23, 2021: https://www.mba.org/news-research-and-resources/research-and-economics

About LBA Ware™:

LBA Ware is a leading provider of cloud-based software for mortgage lenders. Since 2008, LBA Ware has been on a mission to help mortgage companies reach new heights with software that integrates data, incentivizes performance and inspires results. Today, more than 100 lenders of all sizes, including some of the nation's top producing mortgage companies, use LBA Ware's award-winning technology to enhance lender experiences and maximize the human potential within their organizations. A 2020 Inc. 5000 fastest-growing private company, LBA Ware is headquartered in Macon, Georgia. For more information, visit https://www.lbaware.com/.

Twitter: @LBAWare #mortgageindustry #mortgagetechnology #mortgagelending

LBA Ware™, a leading provider of incentive compensation management (ICM) and business intelligence (BI) software solutions for the mortgage industry, today released summary statistics on the state of mortgage industry loan compensation in the second quarter of 2021. The firm's analysis of data from its CompenSafe™ ICM platform showed that despite a marginal increase in loan volume from Q2 2020 to Q2 2021, quarterly commissions per LO were down.

Related link: https://go.lbaware.com/

LBA Ware’s Q1 2021 Mortgage Loan Compensation Report shows slight decrease in basis points paid

MACON, Ga. /ScoopCloud/ -- LBA Ware™, a leading provider of incentive compensation management (ICM) and business intelligence (BI) software solutions for the mortgage industry, today released summary statistics on the state of mortgage industry loan compensation in the first quarter of 2021. The firm's analysis of data from its CompenSafe™ ICM platform showed that increases in year-over-year refinance and purchase loan volume contributed to higher overall commissions for loan originators (LO) and loan processors despite a slight decline in basis points (BPS) paid per loan.

Methodology

LBA Ware reviewed account data for mortgage lenders who used CompenSafe to automate incentive compensation throughout the first quarters of both 2020 and 2021. The controlled, sample dataset consisted of retail, first-lien production from LOs and loan processors with at least six funded loans during the three-month period beginning January 1, 2021, and ending March 31, 2021.

Key Findings:

* Commissions earned by LOs in Q1 2021 increased 52% from Q1 2020 because the average LO funded 55% more loan volume in Q1 2021 than in Q1 2020.

* LOs averaged $1.43M in funded refinance volume per month, an increase of more than 87% over Q1 2020 ($764k), and received an average of 96.332 BPS per refinance loan (versus 96.944 BPS in Q1 2020).

* Purchase volume grew 22% year-over-year, with LOs averaging $1.11M in funded purchase loans per month (versus $912k in Q1 2020) and receiving on average 109.091 BPS per purchase loan (versus 108.251 in Q1 2020).

* Although LO paychecks were larger in Q1 2021 than Q1 2020, the uptick in refinance production and slight downward pressure on BPS paid for refinance loans contributed to a 1.79% decrease in overall per-loan commissions from 103.564 BPS in Q1 2020 to 101.709 BPS in Q1 2021.

* Loan processors handled 29% more loans per month in Q1 2021 compared to Q1 2020, fueling a 51% increase in average incentive compensation earned from $1,451 per processor per month in Q1 2020 to $2,194 in Q1 2021.

* Loan teams grew significantly from Q1 2020 to Q1 2021, with the average lender increasing LO head count by 32% and processor head count by 58%.

* On average, 3.6 individuals were paid a form of loan compensation per loan unit in Q1 2021 (versus 3.2 individuals in Q1 2020).

"They say 'many hands make light work,' and in the first quarter of this year we definitely saw lenders sharing the workload," said LBA Ware Founder and CEO Lori Brewer. "Lenders employed 32% more originators and 58% more processors than this time last year and paid incentive compensation to an average of three to four individuals per loan. So far, volume remains brisk across purchase and refi, but as refi volume wanes it could prove difficult to sustain this level of staffing. This is a trend we will be monitoring closely in the coming months."

About LBA Ware™:

LBA Ware is a leading provider of cloud-based software for mortgage lenders. Since 2008, LBA Ware has been on a mission to help mortgage companies reach new heights with software that integrates data, incentivizes performance and inspires results. Today, more than 100 lenders of all sizes, including some of the nation's top producing mortgage companies, use LBA Ware's award-winning technology to enhance lender experiences and maximize the human potential within their organizations. A 2020 Inc. 5000 fastest-growing private company, LBA Ware is headquartered in Macon, Georgia. For more information, visit https://www.lbaware.com/.

Twitter: @LBAWare #mortgageindustry #mortgagetechnology #mortgagelending

LBA Ware™, a leading provider of incentive compensation management (ICM) and business intelligence (BI) software solutions for the mortgage industry, today released summary statistics on the state of mortgage industry loan compensation in the first quarter of 2021.

Related link: https://go.lbaware.com/