Many companies and their originators are dealing with the challenges of less loan volume. With refinance business about 20% of the volume it was last year and purchase volume down in many markets as well, there is simply less loan units to take through the process, which leads to the reality than many people are either making less money than they were last year, or they have people, salaries, and overhead that they no longer need or can afford.

We have seen tens of thousands of layoffs, some companies reduce locations, even a few just call it quits and either sell themselves off or just closed completely. None of this is a surprise when you see this type of volume reduction in such a short period of time, and those more heavily weighted on turning refinances have felt the most pain. However, that isn’t the end of the story. We do have to take a minute and see the big picture as to what do things cost in the mortgage industry?

What does it really cost to originate a loan? How many people are involved? What do they do? How much do they get paid to do it? What are those tasks worth in the context of the entire process? Are these functions paid for on a per file basis, or is it being done by a salaried person?

 Now is a great time to revisit and examine each role, each player, each job and function, and make a determination as to what is the cost of each task and have we allocated the proper resources to it? Are there people being paid too much for what their role is? Are their people not doing enough to earn the money they are receiving in compensation? Are their loan originators that don’t pay for their own assistants or turn over poor quality applications into processing but expect full commission on those files while the processor has to put everything together? Are there managers, area managers, regional managers, corporate staff and support that are not delivering true value for what they are being paid?

It’s time to have that discussion and realize that money isn’t falling from the sky, it must be earned! I welcome the discussion and if you have any questions or comments, it’s This email address is being protected from spambots. You need JavaScript enabled to view it.