NATNews Blog > July 2015 > Lenders Say Underwriter Productivity Down Dramatically from 2005

    Lenders Say Underwriter Productivity Down Dramatically from 2005

    7/13/2015 10:47:20 AM
    While the mortgage industry often refers to the rising cost of compliance, another method of tracking how regulation, investor requirements, and the threat of indemnifications or repurchases have reshaped operations is through underwriter productivity. 
    On July 10, the Mortgage Bankers Association posted its Chart of the Week, showing a 10-year trend in average monthly underwriter productivity for the retail production channel (excludes third party and consumer direct originations).  For large lenders (firms generally in the top 25 nationwide), productivity is now five times lower than it was 10 years ago, dropping to 33 applications per underwriter in 2014 from 165 applications per underwriter in 2005.  Productivity for mid-sized lenders (firms originating an average of $1.2 billion in the retail channel in 2014) has fallen to 37 applications per underwriter in 2014 from 135 in 2005.  
    Monthly productivity is measured as the average of the number of applications in a given year divided by the number of full-time equivalent underwriters, divided by twelve. Underwriters include junior, senior and all other level underwriters as well as appraisal reviewers, and credit analysts.  While the trend in productivity is similar between large and mid-sized lenders, the value of scale economies observed among large lenders in the 2005-2009 period has diminished as reliance on automated underwriting has lessened.
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