TRID is strangling mortgage profits – report

by Ryan Smith17 Mar 2016
The TRID disclosure rule is strangling mortgage profits, according to a new report from the Mortgage Bankers Association.

According to the MBA’s Quarterly Mortgage Bankers Performance Report, mortgage profits cratered after the Know Before You Owe rule took effect. The report found that independent mortgage banks and mortgage subsidiaries of chartered banks reported a net gain of $493 on each loan originated in the fourth quarter of 2015. That’s down from a gain of $1,238 per loan in the third quarter.

“Production profits dropped by over sixty percent in the fourth quarter of 2015 compared to the third quarter," said Marina Walsh, MBA's vice president of industry analysis. "With the Know Before You Owe (TRID) rule going into effect last October 3rd and declining production volume compared to the third quarter of 2015, mortgage bankers saw their total loan production expenses climb to $7,747 per loan, from $7,080 per loan in the third quarter.

“The fourth quarter marked the second-highest level of production expenses per loan since the inception of our report in the third qharter of 2008,” Walsh added. “However, the average production volume per company was nearly double the first quarter of 2014, when production expenses reached a study high of $8,025 per loan. The increase in total production expenses per loan in the fourth quarter of 2015 cannot be explained solely by volume fluctuations.”

The report also found that average production volume was down in the fourth quarter, dropping from Q3’s average of $614 million per company to $538 million. The per-loan volume was also down. In the third quarter, companies averaged 2,609 loans. that dropped to 2,265 in the fourth quarter.

Meanwhile, personnel costs were up and productivity dropped. Personnel costs rose to an average of $5,131 per loan in the fourth quarter, up from Q3’s $4,674 per loan. Productivity dropped from an average of 2.5 loans originated per employee per month in Q3 to 2.4 in Q4.

Is TRID affecting your business? Let us know in the comments below.


  • by NPG | 3/17/2016 1:36:43 PM

    It is not effecting my business - it is effecting the cost to the consumer.
    Funny how "Know Before You Owe" has made the process more difficult to understand, fees from closing attorney's have doubled, lender underwriting fees have increased, appraisals are up 45%, you have to lock a mortgage for 45 days to be safe - that is costing the consumer a ton of money over the life of the mortgage and reducing their lender credit to help cover closing cost or increasing their fee to buy down the rate.

    Just not sure why no one is talking about the cost to the consumer instead of brokers/banks profits.

    That is why the broker channel is growing and will continue to grow - our fees/rates are much better than the big boxes & correspondent lenders.
    Just my 2cents

  • by Broker Boss | 3/17/2016 1:58:08 PM

    You are exactly right. No one is concerned about the cost to the client. It is ridiculous.

  • by Anonymous | 3/17/2016 1:58:56 PM

    Agreed and we need to address the mandatory 3 day wait before a closing can be scheduled. It is absolutely maddening to everyone in the process. Who on Earth devised that plan to introduce a 3 day wait at the end before a closing can occur? Nobody wants it. In fact, consumers are angry that it exists and they have no ability to waive it. It costs consumers money and frustration, and then there is the 3 day rescission after that with refis. The whole thing is ridiculous and beyond absurd.


Is TILA-RESPA a good or bad thing long term?