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Margin compression is a real and growing concern for mortgage lenders, according to Fannie Mae’s most recent survey. National Mortgage Professional recapped it this way:
Fannie Mae's Q4 2020 Mortgage Lender Sentiment Survey reported that mortgage lenders' profitability outlook over the next three months has declined compared to Q3. The survey showed that a higher number of lenders expect profit margins to decrease, with only 19% of lenders believing profit margins will increase compared to 48% in Q3. Additionally, 33% believe that profits will remain the same and 48% believe profits will decrease.
While there are a variety of reasons for pressure on margins, we all know that every lender is facing the consequences..
The record-breaking volume of residential loans in 2020 masked the problem to a certain extent last year, but as the number of loans is expected to level out in 2021, margin compression is an issue that needs to be addressed.
It’s widely accepted that human capital is 70% of the cost in loan processing. Helping people work more efficiently is a critical step towards returning margins to a more reasonable level.
Triserv can help. Our platform, services, and integrations have proven to help lenders save time and money. Appraisal management is expensive to manage internally, and it costs nothing to outsource.
When outsourcing to Triserv, lenders have a true partner available to manage all the details and ensure appraisal reports are produced in a timely and affordable manner. Our integrations mean an appraisal can be ordered with the touch of a button from most LOSes.
Every dollar that a lender spends on anything other than origination adds to margin compression. Lenders that want to survive and thrive for the long term need to leverage technology as well as service-oriented partners to ensure they’re working as efficiently as possible.
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