MBA Data Highlights TRID-Inspired Tumult

The fourth quarter of 2015 was also the first quarter with lenders operating under the new TRID rule—and the financial impact of TRID is startling.

According to the latest Quarterly Mortgage Bankers Performance Report issued by the Mortgage Bankers Association (MBA), average production volume fell to $538 million per company in the fourth quarter, down from $614 million per company in the third quarter. Volume by count per company averaged 2,265 loans in the fourth quarter, down from 2,609 loans in the third quarter.

Even more startling was the drop in the average pre-tax production profit: A 22 basis points (bps) decline in the fourth quarter, compared to 55 bps in the third quarter. Since inception of the Performance Report, net production income has averaged 53 bps.

But the fourth quarter also saw its share of increases. Total loan production expenses increased to $7,747 per loan in the fourth quarter, from $7,080 in the third quarter, while personnel expenses averaged $5,131 per loan in the fourth quarter, up from $4,674 per loan in the third quarter. And the "net cost to originate" rose to $6,163 per loan in the fourth quarter, up from $5,549 in the third quarter.

"The fourth quarter marked the second highest level of production expenses per loan since inception of our report in the third quarter of 2008," said MBA Vice President of Industry Analysis Marina Walsh.