Mortgage News Daily – As profit margins shrink, mortgage execs look at LO comp
Mortgage executives have a hard time forgetting 2018. The market was coming off a refi boom, competition was fierce, and the profit margins were slim (if there were any at all). In a bid to gain market share, some of the biggest mortgage originators priced loans aggressively to keep production up and attract loan originators. It led to losses for many originators, who were slow to adjust their pricing. Today, as margins again compress due to a combination of rising interest rates, fewer refis and ballooning workforces, mortgage executives are keeping a close eye on LO comp.
Keeping a staff well-fed and happy while minding the bottom line is a delicate balance, mortgage executives said at a panel from the Mortgage Bankers Association‘s spring conference on Wednesday.
“Trees don’t grow to the moon, and at some point volume comes off from refinances and margin will get tighter,” moderator Michael McCauley, principal at mortgage consultancy Garrett, McAuley & Co., told the panelists.