Richey May & Co has released its fourth quarter 2013 Trend Report for Independent Mortgage Bankers. Among the report’s findings are reductions in production, refinance and purchase volumes, and decreases in the average FICO score of borrowers. The fourth quarter 2013 Trend Report was based on information provided by 29 independent mortgage banking firms.
Richey May is a provider of accounting and business advisory services to the mortgage industry and co-creator of Richey May Select, the benchmarking technology platform specifically for independent mortgage bankers. Richey May quarterly trend reports, which are created using Richey May Select, highlight key performance indicators, such as overall volume and volume by transaction type, margins, operating costs, labor output and other metrics.
The following are some of the report’s findings:
- Overall production volume decreased by an average of just under 11 percent. Most lenders saw production decline between 6 percent and 55 percent;
- Refinance volume fell 9 percent, and purchase volume decreased nearly 12 percent;
- The distribution of FICO scores changed by 2 percent, with lenders closing more loans with FICO scores ranging from 651 to 700 and fewer with FICO scores above 750; and
- Approximately one-third of lenders that had not previously extended credit to borrowers with scores under 600 began to do so during the 4th quarter of 2013.
“Lenders are trying a lot of different things to keep production levels up — lending to borrowers with lower FICO scores is just one of them,” said Ken Richey, managing partner of Richey May. “In order to maintain a competitive edge, lenders need to know what their competition is doing. This is one of the reasons that reports like our quarterly trend reports are so important. They give independent mortgage bankers an apples-to-apples comparison of their company’s performance to that of their peers and specific market.”
Richey May Select utilizes much of the same information that its independent mortgage banker sources provide to the GSEs each quarter via the Mortgage Bankers’ Financial Reporting Form (MBFRF). With Richey May Select, users can access relevant peer-to-peer benchmarking information on various aspects of their financial, production, employment, warehousing and servicing operations.