Commissions to initiators decrease annually as the number of employees increases in the second quarter.



According to LBA Ware, between April and June, authors and their teams experienced a decrease in individual compensation compared to an unusually strong Q2 2020, as labor-intensive purchase loans increased and recruitment skyrocketed.

According to a recent study by LBA Ware, commissions per lender were down 6% in the second quarter compared to the same period last year, although lending as a whole increased slightly during the quarter. Average monthly purchases per loan officer rose 49% from Q2 2020 to over $ 1.5 million. The equivalent figure on the refinancing side fell 36% to $ 900,000.

While incentive compensation per LO is generally higher for purchase loans, the amount has decreased compared to last year for both this category (108 bps versus 109) and refinancing (92 versus 99). An increase in the number of employees and a slight decrease in the volume of loans per person, despite a more significant increase in lending, may have contributed to the annual decline.

Processors’ workforce increased by 49% annually, and the average worker in this category received 27% fewer loans. The processor reimbursement dropped to $ 1999 a month from $ 2684.

The fact is that buy-refi mix and index Trends have shifted since the end of the second quarter needs to be considered when analyzing the future implications of these numbers, but as long as consumer sentiment remains stable, they generally suggest that 2021 could be one of the best years for business, even if incentive compensation fluctuates slightly.

“This is still a significant year for mortgages,” LBA Ware founder and CEO Laurie Brewer said Thursday. With an average commission of just over 101 basis points, she said, it is down from about 103 a year ago, but is still within the range normally paid by the OS.

While recent data suggests that outbound volumes may be stable throughout the rest of the year, the pace hiring may not be. Monthly growth in the employment estimate of non-bank mortgages recently showed signs of uncertain for the first time since the numbers fell for the first time since the pandemic. The LBA Ware numbers don’t necessarily support this, Brewer said, but the rise in processor hiring is noticeable.

The numbers in the study reflect a controlled, anonymous dataset of non-bank and custodian mortgage lenders’ accounts that used LBA Ware technology to track incentive LO and processor reward for first-collateralized retail loans. Only CBs and refiners that processed at least six funded loans were included.


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