This time last year, mortgage rates took a nosedive, fueling a tsunami of refi demand. Around the same time, we launched our quarterly loan compensation reports to give the mortgage industry a high-level view of loan originator (LO) productivity and compensation benchmarks. After all, it’s only natural to want to compare how you and your team compare to others.
To help, we compiled the results from our four 2020 quarterly loan compensation reports. Below are our four biggest takeaways, along with an infographic to give you a reference point for how well you did in 2020.
1. Loan originators averaged 8 loans per month
Across 2020, LOs averaged an impressive eight mortgage loans per month. A closer look at the numbers further reveals that loan units per LO rose with each quarter. Refinance loan production peaked in Q2 and Q4, with LOs averaging 14 refis during both of these respective three-month periods. Whereas purchase production peaked in Q3, with LOs averaging 15 units during those three months.
2. LO commission rates held steady at 105.5 BPS
While the increased competition for LO talent was hot on the ground, per loan commission rates were relatively unaffected, averaging 105.5 basis points (BPS) across the year. Commission rates were at their lowest in Q1 (104.519 BPS) and peaked in Q3 (106.018 BPS).
3. Q2 saw the greatest change in production
Examining quarter-over-quarter total production, Q2 saw the biggest spike, with unit production increasing by 61%, volume production by 63%, and commission earnings by 65% over Q1. Q3 and Q4 saw less drastic increases, with Q2 to Q3 unit production increasing by 17%, volume production by 19%, and commission earnings by 20% and Q3 to Q4 unit production by 4%, volume production by 7%, and commission earnings by 5%.
4. Processor hiring nearly doubled that of LOs
While total volume funded increased 106% from Q4 2019 to Q4 2020, processor headcount grew by 51% and LO headcount grew by 27%. In layman's terms? Lenders staffed up in the back office at roughly twice the pace they hired LOs, adding one new processor for every two they had before (compared to one new LO for every four already on the team).
A note on methodology
At LBA Ware, we’re serious about our numbers. With over 100 mortgage lenders — including banks, credit unions, and independent mortgage companies — using our incentive compensation management (ICM) platform CompenSafe™ to process employee commissions, we hold the mortgage industry’s most comprehensive and accurate repository of loan compensation data. Our sample dataset includes only retail, first-lien production from LOs who fund at least six loans a quarter in 2020.