Richey May releases 2013 3rd quarter trend report for independent mortgage bankers
ENGLEWOOD, CO (December 2, 2013) — Richey May & Co, a provider of accounting and business advisory services to the mortgage industry, has released its 2013 third quarter trend report for independent mortgage bankers.
The quarterly survey was created using Richey May Select, Richey May’s award-winning analytical technology that provides benchmarking information derived exclusively from independent mortgage bankers, a growing segment that is poised to take over even more market share. The five biggest banks originated 53.2% of total mortgages in the U.S. in 2012, down from nearly two-thirds in 2010. According to a recent FBR Capital Markets report forecast, that share could shrink to 40% by 2014.
The following are among this quarter’s findings:
- Overall production decreased 12.4 percent from the second quarter, largely due to a decreased number of refinances, which dropped 42 percent during the third quarter
- The percentage of borrowers whose FICO scores are less than 700 increased from 25 percent in the second quarter to 30 percent in the third quarter.
- Average values of servicing portfolios increased by seven basis points, or 0.07 percent, from the second quarter to the third quarter
- Net income declined 60 basis points from the second quarter, although lenders with servicing portfolios in place prior to the third quarter realized smaller declines than those who had no servicing interests
- Loan margins decreased 42 basis points in the third quarter as compared to the second quarter
“Servicing is definitely playing a role in offsetting the declines in origination volume,” said Ken Richey, managing partner of Richey May. “Some lenders have sold portions of their servicing portfolios to compensate for decreases in production and profitability. Others are incorporating servicing as part of their business models, which can be a good option for lenders that can handle the cash flow constraints that are typical of mortgage servicing.”
Richey May Select is the only benchmarking technology that provides information derived exclusively from independent mortgage bankers. It provides quick and easy access to current, relevant, and actionable peer-to-peer benchmarking information on various aspects of financial, production, employment, warehousing and servicing operations. The technology uses much of the same information that its confidential independent mortgage banker sources provide to the GSEs each quarter via the Mortgage Bankers’ Financial Reporting Form (MBFRF). Users can gauge their performance in categories as broad as profitability and volume, and as specific as profitability for refinances versus that of purchase transactions. They can narrow search results according to the information sources’ reported loan production volume; primary operating model – whether retail, wholesale or direct-to-consumer; small, medium or large production platforms; and other unique characteristics and requirements.
All Richey May Select information is updated regularly, with new information available roughly six weeks after the end of each quarter, unlike static benchmarking reports, which often provide dated information that cannot be automatically updated.
Richey May and Motivity Solutions were recently awarded Mortgage Technology’s 2013 Synergy Award for co-creating Richey May Select.
Independent mortgage bankers interested in providing confidential information for use in Richey May Select’s analysis may contact Trevor Reinhart at Trevor@RicheyMay.com.
About Richey, May & Co, LLP
Richey, May & Co is a CPA, business advisory and technology firm specializing in the mortgage industry. The company’s offerings include audit, tax and business consulting services, as well as peer-to-peer benchmarking technology for small to mid-size independent mortgage bankers. Richey May’s clients include mortgage bankers in over 30 states, and range from small local originators to national lenders with annual loan production volumes in excess of $10 billion. In addition to its personalized advisory services and Richey May Select peer-to-peer benchmarking technology, Richey May has become known for its annual salary report of independent mortgage bankers, a survey based on the confidential responses of privately held mortgage banking firms. Richey May was founded in 1985 and is based in Englewood, Colorado. For more information on Richey May, please visit www.RicheyMay.com. For more information on Richey May Select, please visit RicheyMaySelect.com or follow the company at twitter.com/RicheyMay.