The Role of Mortgage on Broker Dollar

by Victor Lund on December 17, 2012

Money TableOnly the largest brokerages in a given region provide loan solutions through joint ventures or wholly owned mortgage companies. This provides these companies with a distinct advantage in many areas of providing a full array of consumer services around home ownership. For these companies, it is a generous source of additional revenue and the consumer loves the convenience.

The Mortgage Bankers Association reported that independent mortgage banks earned between $2150 and $2450 profit per loan in 2012.

The average production profit in basis points ranged between 107 and 120.

The average production was between 1700 and 2000 loans per quarter.

The total loan production expense (commissions, compensation, rent, equipment, and other expenses) averages just over $5100 per loan. About $3300 is personnel expense.

Looking to forecast production for loans in 2013? Productivity per employee averaged 3.9. So choose 4 as your break-even analysis.

To improve the penetration of home service offerings, it is important that brokerages seek tighter integration between business units, especially in the area of data sharing.

  • All home services offerings need to be clearly articulated to the consumer on the broker website, email alerts, newsletters, phone hold recordings, at open houses, in listing presentations, on mobile solutions.
  • All customer record data needs to be collected in DPN or Profit Power and shared with the mortgage company and other home services businesses.
  • Update customer records each year by pulling data from CoreLogic or other public record source to identify mortgage rates.

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